More than US$4 billion has been illegally spent by government officials in south China's Guangdong Province while another US$7 billion has also been lost because of poor management.

More than 400 officials were involved in one way or another in the scam. Details came to light after a five-year investigation between 2000-04, the same period the money was lost.

"The illegal behavior included embezzling public money, spending public funds on lavish dinners and gifts, and shifting public funds to personal accounts," Zeng Shouxi, director of the Guangdong Provincial Audit Department, said in a report released on Saturday.

The Guangdong Provincial Audit Department audited the accounts of 10,772 officials between 2000 and 2004.

The investigation found that the illegally used money reached 35.3 billion yuan (US$4.35 billion).

Those investigated also caused a huge financial loss during the same period, of 61.2 billion yuan (US$7.54 billion), because of their improper management.

After the investigation, 71 government leaders were demoted, 36 were dismissed, 105 were disciplined, and 231 were sent to justice departments for further investigation, according to the report.

The report also showed 747 government officers were promoted. Zeng said these were officials who reported on corrupt officials and worked with the investigators.

But Zeng refused to reveal the names of those promoted or demoted. He promised to improve the audit system to help control corruption.

"In collaboration with the provincial government, we will crackdown on malpractice by government officials in the future," he said.

According to provincial government and audit department plans, from next year all officials below the rank of county magistrate must be audited when due to leave their posts.

From 2007, the audit department will audit the accounts of chief government officials at least once during their terms of office.

The leaders of State-owned enterprises (SOEs) and State-holding enterprises must also be audited before a leader leaves.

The accounts of key projects related to infrastructure and financial development will be supervised by the government, according to the plans.

The Guangdong Provincial Bureau of Supervision, the Guangdong Provincial Bureau of Finance and the Guangdong provincial government also took part in the five-year investigation.

(China Daily October 10, 2005)