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Audit reveals project fraud

0 Comment(s)Print E-mail Shanghai Daily, June 21, 2011
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Two-thirds of projects financed by foreign agencies on China's mainland had problems such as misuse of capital, accounting fraud and weak internal controls, China's top auditor said Monday.

The National Audit Office posted the findings on its website yesterday after going through the books of 102 projects involving overseas institutions such as the World Bank, the Asian Development Bank and the United Nations Development Program in China in 2010.

The auditor said 17 projects were found to have problems that had a major impact on their books, while another 50 had various minor irregularities.

Auditors examined the books of 26 projects which had received loans and 76 fully sponsored by overseas institutions. The projects covered industries including agriculture, energy, transport, education, urban construction and environmental protection and involved a total investment of 289.8 billion yuan (US$44.7 billion).

The audit agency found that 219 million yuan in seven projects had been embezzled or retained by local government or project contractors.

Another 36 were found with irregularities such as falsified expenditure, overspending and late payments of tax involving a total of 492 million yuan.

Another 13 projects, worth 832 million yuan, didn't go through a proper bidding process.

Other projects were found to have various problems regarding their operation and finances.

A majority of the problems had been corrected, the auditor said.

For example, 97 percent of the 219 million yuan was properly used after the auditor ordered relevant parties to correct their wrongdoings.

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