The National Audit Office (CNAO) said it will intensify
supervision of projects using foreign aid this year.
Chen Hua, director of the CNAO's Department of Foreign Funds
Application Auditing, was quoted in Wednesday's China Audit
Post as saying that the focus will be on notarizing the annual
reports of over 500 projects using foreign aid loans, and on
probing foreign-funded projects.
She was addressing a course in Beijing attended by more than 70
CNAO trainees, which ended today.
The auditing of foreign aid funds used to focus on loan
projects, since most loan providers demand notarization of annual
financial reports.
"The office's plan this year shows more attention to other
projects such as aid programs," said an International Cooperation
Department official from the Ministry of Commerce. "It
will be the first time it conducts such massive investigation of
foreign aid projects."
China has received more than 1,000 foreign aid programs since
1980, involving US$5.6 billion in cash, according to the
ministry.
Some 70 percent of the money is invested in the country's less
well-off central and western regions.
The CNAO has become known for taking on powerful government
units to fight financial abuse and corruption.
It stirred an "auditing storm" last year by reporting
high-profile economic crime and misconduct by senior officials in
organizations such as the General Administration of Sport and the
State Power Corporation.
The office set up a department to monitor the use of foreign
funds in 1984. Nationwide, 513 projects funded by foreign aid loans
were audited last year, and 516 reports issued, including 25 in
which reservations were noted and two in which auditors refused to
state opinions.
"Auditors' notarization is not only a procedure now, but is
making progress on substantive matters," the China Audit
Post quoted Dong Dasheng, the CNAO's deputy auditor-general,
as saying.
Dong said that efficiency is as much an issue as legality in
these cases.
An audit of railway projects funded by the government's external
treasury bonds last year found that some major engineering and rail
maintenance equipment as well as communication facilities remained
idle because of poor planning and management.
It also reported abuses in the public bidding process for
equipment purchases, but the newspaper did not mention the amount
of money involved.
(China Daily January 27, 2005)