Auditor-General Li Jinhua yesterday said 1.4 billion yuan (US$170 million)
were misused out of the 2003 budget.
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 out of the
55 central 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.
Li chose the General Administration of Sports as an example. Since 1999, the
sports administration misused 131 million yuan of funds
from China's National Olympic Committee.
About 109 million yuan (US$13.2 million) of the fund was misused to put up
residential buildings for the staff of the sports administration, and the
rest was invested into companies, according to the audit report.
Misuse of funds for poverty alleviation was particularly serious in more than
590 poverty-stricken counties that were examined by the National Audit Office
last year.
Li said most of the low-interest loans, which should have gone into the
pockets of farmers, was used for traffic, electrical power and communication
industries.
For instance, only 2.8 million yuan (US$340,000) in low-interest loans in
Southwest China's municipality of Chongqing was allocated to farmers, accounting
for merely 0.3 per cent of the total loans to aid the poor.
As a result, many farmers could not get soft loans and had to borrow money
from rural credit co-operatives with an annual interest of 6 per cent, 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.
For instance, a private company in Central China's Hubei Province allegedly
defrauded more than 18 million yuan (US$2.2 million) from the compensation funds
by colluding with a local township government.
And appropriation of farmland was rampant in some areas, such as the Oriental
University City Co Ltd illegally renting at least 380 hectares of farmland to
build golf courses at the border of Beijing and Hebei Province, said the report.
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 per cent year-on-year.
Although the figure gave officials reason to smile, the low economic returns
of 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 into full operation.
For instance, the construction of a gasworks in Central China's Henan
Province, with an investment of 2.3 billion yuan (US$278 million), started 16
years ago and finished in 2001.
The gas market has changed a lot during the 16 years but local policy-makers
failed to readjust the original plan according to the developing situation.
As a result, the gasworks ran in the red since it went into operation.
As to the tax collection circle, the audit office scrutinized 788 enterprises
nationwide last year and found a total of 25.1 billion yuan (US$3 billion) were
evaded in taxes between January 2002 and December 2003.
The tax bureau of Tangshan, a city in North China's Hebei Province,
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 received punishments and
two of them have been brought to the court.
