Seven Chinese charities fail state check

BEIJING -- Seven out of 172 charity foundations in China failed to pass an annual check due to misconduct, including slack financial management and information disclosure, the Ministry of Civil Affairs has said.

Among the 172 foundations inspected, 153 were deemed qualified and 12 were "basically qualified" -- a term indicating room for improvement, according to a ministry statement released Thursday.

Misconduct found in the year-end check included for-profit projects, ?misreporting of charitable spending, administrative overspending, improper financial management as well as slack monitoring and information disclosure, the ministry said.

According to the statement, questionable foundations will be pressed to correct mistakes in line with the official annual inspection reports being prepared by the ministry, and those failing to comply will see their ratings lowered and taxation privileges cut.

Liao Hong, a senior official with the ministry, revealed that a system to blacklist discredited social organizations is being built based on a national social credit network, and the ministry will intensify efforts to monitor social organizations and punish wrongdoers.

Official figures show that a total of 5,829 cases involving the administration of social organizations were dealt with in 2013, more than quadruple that in 2012.

China had 511,300 registered social organizations as of the end of September, among which 3,300 were foundations.