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Audit exposes $440m of misused funds in Shenzhen

By Liang Qiwen (China Daily)
Updated: 2008-11-26 08:53

GUANGZHOU: More than 3 billion yuan ($440 million) of public money earmarked for environmental and housing projects in Shenzhen was misappropriated or misused in the past four years, local media reported Tuesday.

The anomalies were exposed by an audit of Shenzhen's government performance released on Monday, the Guangzhou-based South China Metropolis Daily reported.

The municipality's audit bureau investigated the use of eight funds this year.

These included the construction of an agricultural products manufacturing center, repairing public housing facilities, improving environmental protection, building garbage forwarding stations and constructing a children's palace.

The audit report found most of the funds were used properly and effectively, unlike those for environmental protection and public house repairs.

Between 2004 and 2007, three of Shenzhen's six districts misappropriated more than 140 million yuan, money slated for sewage control or facility purchases needed to improve the environment, the audit found.

It was instead used to maintain government operations of Bao'an, Longgang and Nanshan districts.

Longgang misappropriated the most (75.4 million yuan), while Nanshan used the least (2.67 million yuan).

Shenzhen's environmental protection bureau refused to accept responsibility and shifted blame onto the central government, the report said.

The bureau claimed Beijing released documents on how to manage special funds in 2003, but did not release penalties for those who misused funds until 2006.

Therefore, some Shenzhen bureaus misappropriated money in the interim.

Meanwhile, the bureau of land resources and housing management was found to have let a 3-billion-yuan fund go unused from 2006 to June this year.

The bureau regularly collected money from house owners between August 2006 and June, purportedly to improve public facilities, According to the report. But not one penny was withdrawn from the fund to carry out works.

The local land resources and housing management bureau claimed a regulation by the municipal government required them to stop approving public housing repair projects two years ago.

The former promised it will properly use the fund as soon as possible.

"The authority should thoroughly investigate the two problems, especially the misappropriation one, and punish specific persons who have violated regulations," Dong Guoqiang, deputy director of the plan budget committee of Shenzhen people's congress, said.

The problems are not tolerable and the government must require relevant departments to strictly enforce financial discipline, he added.