China's Ministry of Labor and Social Security is ordering local
governments to make up the shortfall in social security funds after
striking misappropriations were exposed.
Social security funds still able to be tracked in unauthorized
investments should be retrieved immediately, the ministry said.
Local governments, responsible for the management of social
security funds, should top up shortfalls themselves if
misappropriated funds are lost or unable to be traced, said the
ministry.
The National Audit Office published an audit report on November
23,revealing approximately 7.1 billion yuan (US$900 million) of
China's two trillion yuan social security funds had been
embezzled.
The funds were said to be siphoned off for "overseas investment,
commercial loans to companies, construction of government buildings
and other purposes".
Liu Yongfu, Deputy Minister of Labor and Social Security,
concluded that the essential cause was an inadequate awareness of
the significance of social security funds. As a result, state
regulations and policies were not strictly implemented in some
regions.
"Labor and social security departments, subordinate to their
local governments, should take the most blame and rectify
malpractice in the management of social security funds," Liu
said.
The ministry has ordered all social security funds to be kept in
separate accounts and urged local labor and social security
departments to draw up plans to improve fund management by the end
of December.
The ministry is also preparing to set up an information release
system, which is expected to publish the operation of social
security funds each season and every year.
It calls for wider media and public supervision over collection,
expenditure and all the other aspects of fund management.
The misappropriation of social security funds was highlighted in
September by the Shanghai scandal, involving 3.2 billion yuan of
city funds, which brought down Chen Liangyu, secretary of local
committee of Communist Party of China (CPC).
The social security framework in China includes five main
insurance programs: pensions, unemployment, medical, injuries at
work, and pre-natal and post-natal care for women workers.
(Xinhua News Agency December 3, 2006)