China’s audit of central govt budget uncovers array of problems

2014-06-25

An audit of last year’s Chinese central government budget has exposed a litany of problems, from bad loans being covered up to money diverted from poverty alleviation schemes and meetings in luxury hotels, the auditor said on Tuesday.

In a lengthy report, China’s National Audit Office gave examples of issues it had discovered, but it not give the total sum of misspent funds.

More than 1,100 people were found to have been involved in criminal behaviour, it said, however.

“From the audit it can be seen that the problem of orders and bans not being followed is still prominent, showing that some departments and individuals have a hazy idea about the law and discipline,” it said.

A total of 38 central government departments and 389 bodies under them were audited, amounting to some 154 billion yuan (14.59 billion pounds) of spending, or about a third of the 2013 budget.

Although spending on meetings, travel and official transport dropped 23 percent from the previous year following a high-profile campaign to tackle graft and waste, not everyone got the message, the auditor said.

The Transport Ministry was singled out for holding 87 meetings last year at five-star hotels, while a geological research institute team spent three days in U.S. gambling hub Las Vegas while supposedly on a scientific trip.

In the financial sector, the auditor said three financial bodies had incorrectly issued loans or covered up bad loans worth 18.3 billion yuan. It did not name the bodies.

On the issue of government debt, it said that of the nine provinces and nine cities it looked at, debt rose 3.79 percent between June 2013 and March 2014.

Dalian Shide Group Co. and Ruiyang (Dalian) Investment Management Ltd were singled out for using 268 million yuan in subsidies assigned for overseas mergers and acquisitions of technology enterprises to buy 14 wine estates in France.

In Jianyang city of Sichuan province, 1.42 billion yuan allocated for public welfare spending was misappropriated between 2010 and 2013 and funnelled into major projects and industrial parks construction.

China’s powerful state-owned industries received criticism too, with mismanagement of key projects blamed for losses or potential losses of 13.4 billion yuan.

The audit found that 11 central government-controlled conglomerates misreported revenue of 7.34 billion yuan and profits of 5.67 billion yuan.

Source from : Reuters

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