China's top audit body has finally released the list of 42 central government departments which misappropriated State funds last year.

(Premier underscores role of auditing)

Violators include powerful departments such as the National Reform and Development Commission and the ministries of education, health, culture, commerce, personnel, finance, agriculture, public security, railways and civil affairs.

Also on the list are the administrations of customs, sports, forestry, and tourism as well as some ministerial-level institutions like the Chinese Academy of Sciences, the Chinese Academy of Social Sciences and the National School of Administration.

An announcement posted on the website of the National Audit Office (NAO) late on Monday named the violators and the details of their irregular implementation of the 2005 central budget.

But the list apparently fell short of the 48 central government departments cited by Auditor-General Li Jinhua in his annual report to the Standing Committee of the National People's Congress (NPC) on June 27.

Li told lawmakers that the 48 departments and 274 affiliated units had misused 5.51 billion yuan (US$688 million) of the central budget in 2005, but did not name them.

But the names of sensitive departments such as the ministries of foreign affairs, State security, national defence and supervision do not figure in the latest announcement.

The NAO has pledged to open all audit and investigation reports to the public except for those concerning State secrets.

The Xinhua News Agency reported yesterday that 13 departments named in the audit announcement had moved to correct their wrongdoings and vowed to tighten control over budgets.

Monday's announcement, however, has again focused the spotlight on rampant misuse of State funds due to lack of tight auditing standards.

The transgressions range from reporting non-existent workers or fabricated projects, embezzling special funds for constructing office buildings to hiding revenues and fabricating expenditures.

Auditors also found examples of unauthorized spending of cash surpluses, bogus expense claims for receiving foreign guests, unreported sales of assets, and the embezzlement of special and scientific research funds.

Analysts said the NAO's move to make public the details will ease concerns that it may break away from its aggressive approach in uncovering inappropriate use of public funds.

Since 2003, when the NAO published the full text of its annual audit report for the first time in China's history, Li has won nationwide applause and fame.

Dubbed the "iron-faced auditor," Li has triggered an "audit storm" each year through his frank and straightforward account of problems in his annual audit report to the NPC, China's top legislature, and a large number of government departments have been exposed as misappropriating funds.

In response to media reports, one of Li's colleagues reportedly argued that Li had chosen to focus on the bigger picture in his annual report and leave details of specific cases to day-to-day reports.

Some of the major cases of misappropriation and irregularities revealed in Monday's audit announcement are:

The People's Bank of China, the central bank, spent 1.01 billion yuan (US$126 million) on purchasing or building fixed assets against rules, and misused 126 million yuan (US$15.75 million) of operation expenses to pay employee salaries.

A State Forestry Administration department in charge of managing World Bank loans misused 567 million yuan (US$70 million) allocated to pay back to the World Bank, and spent 1.2 million yuan (US$150,000) on staff members' personal investments.

The Beijing Railway Bureau under the Ministry of Railways misappropriated 164 million yuan (US$20.5 million) from its coffers to build a luxury villa hotel in Beijing's rural Shijingshan District.

The Sports Fund Management Centre, affiliated to the State General Administration of Sports, failed to record 138 million yuan (US$17.25 million) of income from the sale of shares in one of its limited liability companies.

In 2002, staff at the centre embezzled 27.87 million yuan (US$3.48 million) from the public welfare lottery fund to invest in securities. The sum had not been recovered by the end of 2005.

Staff at the Welfare Lottery Centre, affiliated to Ministry of Civil Affairs, in 1996 embezzled 50 million yuan (US$6.25 million) to deposit in a one-year fixed-term account to collect interest. But the financial company, which is under liquidation, has not refunded the principal capital, leaving the 50 million yuan (US$6.25 million) of State assets in danger of loss.

The Ministry of Civil Affairs failed to report 749 million yuan (US$93.6 million) in its public accounts.

The Beijing Institute of Technology, affiliated to the Commission of Science, Technology and Industry for National Defence, misused 24.11 million yuan (US$3 million) of scientific research funds to subsidize the purchase of apartments by its employees.

(China Daily 09/13/2006 page1)