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Chinese government agencies have returned 4.16 billion yuan (US$520 million) in misappropriated funds, announced China's National Audit Office (CNAO) in Beijing Wednesday.

According to the announcement the government departments involved have also turned over 1.18 billion yuan (US$147.07 million) to the central budget and reallocated 11.76 billion yuan (US$1.47 billion). For example, the 2.4 billion yuan credit balance for 10 water conservancy construction projects which included harnessing the lower reaches of the Yellow River had been left untouched for a long period of time. Now the majority of the funding has been returned and is being used for the projects. 

One hundred and fourteen cases of suspected malpractice were discovered during the 2004 audit leading to the punishment of 213 of those involved and the arrest, indictment and sentencing of 76 officials.

Ten of the 12 departments accused of falsifying budget reports had transferred 390 million yuan (US$48.75 million) in over claimed expenses to the following year's budget.

Of the 26 central government departments that misappropriated 1.07 billion yuan (US$133.36 million) in 2004, 23 had made refunds involving 873 million yuan (US$108.81million).

The Ministry of Finance has pledged to promote budget management reform.

Water project funding mismanaged

Large amounts of construction funding for China's water conservation projects have been mismanaged an audit report states.

It says CNAO audited management and use of 71.6 billion yuan (US$8.9 billion) of construction funds for China's water conservation projects from 2002 through 2003 which accounted for 77 percent of the total construction funds available for such work during that time. 

The audit, carried out in 2004, revealed that more than 3.5 billion yuan (US$437.5 million) of funds had been retained for no sound reason and nearly 1.4 billion yuan (US$175 million) had been used improperly.

The report says nearly one billion yuan (US$125 million) had been used for purposes other than water conservation projects. This included building hotels and giving subsidies and bonuses to staff on some projects.

Qinghai-Tibet railway -- environmental audit result

CNAO also released the full results of its audit on the use of funds for implementation of environmental protection along the Qinghai-Tibet railway on www.gov.cn.

The audit was based on an investment plan to build the Qinghai-Tibet railway, issued by the State Development and Reform Commission and the Qinghai-Tibet railway environmental impact evaluation report which was adopted by the State Environmental Protection Administration and the Ministry of Water Resources.

In order to reduce the negative impact of the railway construction on wildlife 33 passageways were built for animals to cross the railway. By June 2005 all the passageways had been completed. Auditors assessed four of these passageways and concluded that the construction quality met the required technical standards.

According to observations by the Institute of Zoology of the Chinese Academy of Sciences, in 2003, more than 400 antelopes came to Hoh Xil via these passageways and reproduced. This figure increased to more than 1,500 in 2005. Before antelopes would take several days to cross the railway line but now they could do it within an hour.

"All the facts prove that the antelopes have adapted to the existence of the railway," the bulletin said.

In a bid to ensure the solidity of the railway in frozen areas, more bridges were built. Auditors found that all these had been completed to a high standard by June 2005, the bulletin noted.

It also stated that the government planned to spend 1.54 billion yuan (US$193 million) on environmental protection along the Qinghai-Tibet railway which accounted for 4.6 percent of the total railway investment. By June 2005, 1.45 billion yuan (US$181 million) of investment had been utilized and no problems were discovered by auditors in the use of funds.

Construction on the Qinghai-Tibet railway, from Golmud to Lhasa, started in June 2001 and stretches 1,142 kilometers.

(Xinhua News Agency March 30, 2006)