The Chinese government will launch an audit campaign to examine
pension funds under provincial and city supervision following the
Shanghai pension fund scandal that involved millions of misused
dollars.
The campaign is designed to ensure that no other large-scale
government pension fund is misappropriated, said Li Jinhua,
auditor-general of the National Audit Office (NAO)
The campaign is to cover all major cities and provinces,
expanding beyond a campaign in August that involved social security
funds of 29 provincial regions and five major cities.
In September, Shanghai municipality revealed that more than
three billion yuan (US$370 million) had been misappropriated from
its pension fund, which covers a population of 12 million people,
and invested in highway construction and property deals.
By law, pension funds can only be invested as bank deposits or
in national bonds or securities.
The NAO revealed in November after the August audit that its
investigators uncovered 7.1 billion yuan, or US$900 million, in
pension funds misused in overseas investments, construction
projects and unauthorized lending.
But social security funds at county level are not included in
next year's auditing plan, leading to worries that more problems
are yet to be uncovered.
Most of social security funds are operated by cities and
counties and only a few by provinces, said Li Shaoguang, a
researcher with the public administration college of the
Beijing-based Renmin University.
He suggested that social security funds should be submitted to
operation by financial institutions entrusted by governments,
instead of governments themselves.
(Xinhua News Agency December 14, 2006)