Many ministries misused funds, report says
By Su Qiang (China Daily)
Updated: 2005-10-11 05:57

The health and education ministries were among the 38 government bodies which improperly used budget funds in the 2003-04 fiscal year. This was among the long-awaited findings released by the National Audit Office (NAO) on its website recently.

As of Sunday, only eight government departments including the civil-aviation and sports administrations and the Ministry of Water Resources had submitted rectification plans to the NAO.

The report showed that misuse of funds was widespread among many ministries and institutions such as the Chinese Law Society.

According to the findings, the situation had not changed much in the 2003-04 fiscal year in four main categories of fund misuse.

Embezzlement, inflating amounts in applications for budgets, setting up private accounts and illegal fee-collection top the list of problems, the report says.

The National Centre for Health Inspection and Supervision under the Ministry of Health purchased six cars for 1.91 million yuan (US$235,000), which should have been used for other, more urgent purposes.

Some departments overstated the need for funds while applying to the Ministry of Finance; and some secured double, or even triple, the amount they needed for various programmes.

Last year, the Ministry of Finance approved 600 million yuan (US$74 million) for a programme proposed by the Ministry of Commerce, but only 40.5 million yuan (US$5 million) or 6.75 per cent, was spent on it, according the report.

Fee collection was marred by irregularities, especially in educational institutions and hospitals.

The report says that the amount of improperly or illegally-used funds hit 9.06 billion yuan (US$1.11 billion), or 6 per cent of the total budget.

According to Chinese law, the National Audit Office is entitled to only investigate misuse or improper use of budgetary funds but has no power to censure or penalize offenders.

(China Daily 10/11/2005 page2)