About 6.87 billion yuan of central budget misused: chief auditor

China's auditor-general said in 2006 misappropriated government funds amounted to almost 7 billion yuan (about 902 million U.S. dollars), while more than 37 billion yuan was not properly managed.

In his annual audit report to China's top legislature, Li Jinhua said his auditors found that 56 central government departments had misused 1.52 billion yuan, while 434 organizations under their control misappropriated 5.35 billion yuan.

The head of the National Audit Office, said his office also found "managerial irregularities" involving 37.28 billion yuan in central government budgetary funds.

Another 2.73 billion yuan was squandered or wasted by central government departments and their subordinate agencies, Li said in his report to the Standing Committee of the National People's Congress.

Ninety-two subordinate agencies of 25 central departments, including the Ministry of Culture and the National Development and Reform Commission, were blamed for misusing 2.75 billion yuan of central budgets and special funds, accounting for 40 percent of the total misused budgets.

Thirty-three central departments, including the General Administration of Customs and the South-to-North Water Diversion Office, were also named by the chief auditor for misusing 859 million yuan.

The money was mainly used for repaying loans, infrastructure development, improper investment or daily expenditures on themselves, Li said.

Five agencies under four state departments, including the Civil Aviation Administration of China and the Ministry of Information Industry, blew budgets on office buildings or training centers. About 1.73 billion yuan was misused.

Three state departments - the State Environmental Protection Administration of China (SEPA), the State Tobacco Monopoly Administration and the Civil Aviation Administration of China - cheated a combined 84.9 million yuan of central budgetary funds by reporting fabricated projects or lying about the number of their staff.

SEPA earned 31.2 million yuan of central budgetary funds by applying twice for the same research project, Li said.

Fifteen state departments, including the All-China Federation of Supply and Marketing Cooperatives and the Press and Publication Administration of China, earned 394 million yuan by cutting special funds, hiding their revenue or fabricating expenditures.

"This year's audit on central budgetary funds led to the discovery of 17 cases of economic crimes. Twenty eight people involved are now under investigation by relevant departments," Li said.

According to Li's report, 94 people have been arrested, prosecuted or jailed following the exposure of 106 cases of misuse of budgetary funds in 2006. Another 177 people were disciplined.

Li said his office has ordered relevant departments to rectify the budgetary problems and so far 18 departments have straightened up their problems, involving 10.75 billion yuan of central budgetary funds.

He said auditors have found that the government's budgetary and accounting management capabilities have improved and the irregularities have decreased over the years.

"The sum of budgetary funds, misused or poorly managed, by the 24 central departments, which were also scrutinized in the previous round of auditing, declined by 53 percent," Li said.

Government efficiency in budget implementation was also greatly improved, Li said. "About 95 percent of the 2006 central budgetary funds were allocated to specific projects or units promptly by the state departments."

The fiscal revenue of China's central government reached 2.1 trillion yuan in 2006. The central government ran a deficit of 275 billion yuan with expenditures of 2.3 trillion yuan.

Source: Xinhua