Construction projects associated with the 2008 Beijing Olympic Games have been identified by the Chinese National Audit Office (CNAO) as their top priorities in this year's auditing work, Li Jinhua, auditor-general of the CNAO, said yesterday.

The move is designed to guarantee the effective use of funds and to ensure corruption is kept away from Olympic projects, Li said at the annual auditing work conference.

Li said the CNAO would audit major government investment projects and "investigate and prosecute according to law if any bribery is discovered."

Former deputy mayor of Beijing, Liu Zhihua, who was responsible for US$40 billion of Olympic construction funding, was fired last year for alleged corruption.

Liu Qi, chair of the Beijing Olympic Organizing Committee, said the CNAO had been supervising the financial statements of Olympic projects since the outset and the Beijing Audit Bureau along with them had jointly conducted reviews.

Liu gave assurances that the projects were being supervised and strictly audited and the funds?had been?used according to regulations.

The CNAO also planned to give priority in 2007 to the south-to-north water diversion project and major railway construction contracts, said Li.

Li also explained at the work conference that for the year 2006 the CNAO had discovered 7.1 billion yuan (US$909.5 million) in illegally used social security funds.
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The money was illegally borrowed, used or deposited. The amount includes 2.3 billion yuan (US$294.6 million)?that was misused before 1999.

The CNAO audited the pension fund for enterprise employees, medical insurance for urban workers and the unemployment insurance fund in 29 regions and five selected cities.

Li said seven special funds, worth a total of more than 1 trillion yuan (US$128.1 billion), were audited in 2006.

They're used for transfer payments to local governments, social security, public housing, natural forest conservation, the resettlement and control of geological problems in the Three Gorges area and the control of sand storms in the Beijing-Tianjin region.

Li said the management and use of the funds was generally good despite the problems discovered.

The audit of the Three Gorges resettlement fund discovered 200 million yuan (US$25.6 million) was illegally claimed or used and five cases of misappropriation have been given to judicial institutions.

Li said this year the CNAO would strengthen auditing and supervision of public service sectors as well as special funds covering agriculture, education, medical, social security and environmental protection.

(Xinhua News Agency January 9, 2007)