The health and education ministries were among 38 government bodies that improperly used funds in the 2003-04 fiscal year, according to a long-awaited report released by the National Audit Office (NAO) on its website on September 28.

But as of Sunday, only eight government departments including the civil aviation and sports administrations and the Ministry of Water Resources had submitted rectification plans to the NAO, according to today's China Daily.

The report said misuse of funds was widespread among many ministries and institutions including the Chinese Law Society.

According to the findings, the situation had not changed much in the 2003-04 fiscal year in four main categories of fund misuse.

Embezzlement, inflating amounts in applications for budgets, setting up private accounts and illegal fee-collection topped the list of problems identified.

The Ministry of Health's National Centre for Health Inspection and Supervision purchased six cars for 1.91 million yuan (US$235,000), which should have been used for other, more urgent purposes, said the report.

Some departments overstated the need for funds while applying to the Ministry of Finance for them; and some secured double, or even triple, the amount they needed for various programs.

Last year, the Ministry of Finance approved 600 million yuan (US$74 million) for a program proposed by the Ministry of Commerce, but only 40.5 million yuan (US$5 million) or 6.75 percent, was spent on it, according the report.

Fee collection was also marred by irregularities, especially in educational institutions and hospitals.

The report said the amount of improperly or illegally used funds totaled 9.06 billion yuan (US$1.11 billion), 6 percent of the total budget.

According to law, the NAO can investigate misuse or improper use of budgetary funds but has no power to censure or penalize offenders.

(China Daily October 11, 2005)