China annual "audit storm" uncovers billions lost

[HenryTo]

These are official numbers - is anyone surprised? I wonder what the figure will be if local governments and local officials are taken into account?
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Wednesday June 29, 12:28 PM
China annual "audit storm" uncovers billions lost to graft

BEIJING (AFP) - China's 2004 state audit report has uncovered 9.06 billion yuan (1.1 billion dollars) of misappropriated funds by government departments and 14.5 billion yuan by state companies.

The annual report, open to public scrutiny only since 2003, has formed the basis for investigations into graft, with the state press following up the report findings in what has come to be known as China's "audit storm."

The report detailed wide-ranging irregularities in the approriations of 4.9 billion yuan for water project investment and 4.1 billion yuan for rural highway construction.

Corruption in education in 2004 was also rife with 868 million yuan worth of fees illegally collected by government-run universities and 669 million yuan in scientific research funds misappropriated, the report said.

Auditor general Li Jinhua handed the report to the National People's Congress.

"There are holes in the budget management system of some departments. They make use of their funds to improperly make profits for themselves," Li told the meeting.

He gave details of embezzlement and misuse of funds across the board, including the widespread use of slush funds and diverting government money into private bank accounts or subsidiary government-run companies.

Li also singled out the Ministry of Sports' handling of the nation's popular sports lottery, saying 558 million yuan in lottery profits were diverted to two subordinate companies which distributed some of the funds to staff as bonuses.

Li said that the sports ministry had "failed to corrrect its mistakes" after the 2003 audit report found that 109 million yuan earmarked for organizing the 2008 Beijing Olympic Games had been embezzled to build new apartments, Xinhua news agency said.

Gross irregularities were also found among China's four state-run asset management companies although no details were immediately available.

China Huarong Asset Management Corp, China Great Wall Asset Management Corp, China Orient Asset Management Corp and China Cinda Asset Management Corp were set up in 1999 to help public banks get rid of their bad debts.