Auditor-General Li Jinhua reported Wednesday that 1.4 billion
yuan (US$170 million) of the 2003 budget was misused or wrongfully
appropriated.
In his audit report delivered to the Standing Committee of the
10th National People's Congress (NPC), Li said malpractice cases
were found in 41 of the 55 central government departments under
investigation.
Most of the money, originally allocated for specific purposes,
has gone into the hands of staff members or to office building
construction.
The General Administration of Sports provides one example. Since
1999, that administration has appropriated 131 million yuan
(US$15.8 million) for the Beijing Olympic organizing committee.
About 109 million yuan (US$13.2 million) of the money was used
to put up apartment buildings for its employees and the rest was
invested into companies, according to the audit report.
Misuse of funds for poverty alleviation was particularly serious
last year in more than 590 poverty-stricken counties that the
National Audit Office examined.
Li said most of the low-interest loans that should have gone
into the pockets of farmers were used in the transportation,
electrical power and communication industries.
For instance, only 2.8 million yuan (US$340,000) in low-interest
loans in southwest China's Chongqing
Municipality was allocated to farmers, accounting for merely
0.3 percent of the total loans to aid the poor. As a result, many
farmers had to borrow money from rural credit cooperatives at an
annual interest rate of 6 percent, said Li.
The National Audit Office also discovered several illegal
activities in sales of land-use rights in 10 cities around China,
while farmers were not adequately compensated for land
expropriation.
A private company in central China's Hubei
Province allegedly defrauded the compensation fund of more than
18 million yuan (US$2.2 million) by colluding with a local township
government.
Appropriation of farmland was rampant in some areas. The
Oriental University City Company, for instance, illegally rented at
least 380 hectares of farmland to build golf courses at the border
of Beijing and Hebei
Province.
Li said the country's fiscal revenue last year topped 2 trillion
yuan (US$242 billion) for the first time, a rise of 14.9 percent
year-on-year. Although the figure gave officials reason to smile,
the low returns on government-invested projects have given them
some cause for concern, said Li.
He said a quarter of some 526 infrastructure projects nationwide
were not completed as scheduled, and 119 out of 320 selected
projects, although finished, cannot be put fully into
operation.
The construction of a gasworks in central China's Henan Province
is a good example. It was begun 16 years ago with an investment of
2.3 billion yuan (US$278 million) and finished in 2001.
Despite significant changes in the gas market during those 16
years, local policymakers failed to readjust the original plan. As
a result, the facility has been in the red since it went into
operation.
The audit office also scrutinized the preceding year's tax
records of 788 enterprises nationwide. It found tax evasions worth
a total of 25.1 billion yuan (US$3 billion) for the period January
2002 to December 200.
The tax bureau of Tangshan, in north China's Hebei Province, had
unlawfully allowed 13 local iron firms to defer tax payments of
more than 1 billion yuan (US$121 million) since November 2002.
So far, more than 70 local officials involved have been
disciplined and two cases have been referred to the courts.
(China Daily June 24, 2004)