TO RAISE LIVING STANDARDS

SCAMS NET MILLIONS OF YUAN INTENDED FOR PROJECTS The National Audit Office has uncovered fraud, embezzlement and malpractice in a number of provinces, as Zhang Yi reports.

Hundreds of millions of yuan have been stolen or held in local government bank accounts, rather than being used for poverty-alleviation projects, according to a wide-ranging probe conducted by the National Audit Office.

A nationwide inspection found that 15 companies and agencies in five provinces had forged contracts to gain access to 12 million yuan ($1.7 million) of funding.

Misconduct in the bidding processes for projects worth a combined 62 million yuan was uncovered in three provinces last year, and inspectors also found that 237 million yuan sat idle in local government bank accounts for more than a year in six provinces — Liaoning, Jilin, Jiangxi, Hubei, Yunnan and Shaanxi — with 196 million yuan held unused for more than two years.

The three-month audit, which began in October, was part of wider efforts to crack down on corruption related to funds provided to meet the government’s target of eradicating poverty nationwide by 2020.

Last year, each auditor spent an average of 200 days away from the office undertaking trips to povertystricken areas, according to Cao Sheng, an auditor at the NAO branch in Chengdu, capital of the southwestern province of Sichuan. At the end of December, 3.8 million people in the province were classified as living below the poverty line.

Poverty-alleviation projects involve huge amounts of government funding, with the money spread across a number of areas and individuals. Therefore, auditors are required to assess how county-level governments utilize money intended for poverty-relief work, according to the NAO in Chengdu.

Knowledge and experience

“The modus operandi for the misappropriation of public money earmarked for poverty-alleviation projects varies from case to case. That means the auditors must possess sound knowledge and deep experience of both finance and government policies to cope with this scourge. In addition, they must be devoted and resilient because they often need to travel long distances to remote areas and walk for hours to reach isolated villages and conduct field investigations,” Cao said.

During a recent audit of funds allocated to projects intended to help impoverished residents of Gulin county in Sichuan, auditors spent seven hours on the road from Chengdu. During the audit, they were shocked to discover that a local company had fraudulently claimed thousands of yuan by using fake documents.

According to officials, the company, Shanyuan Papaya Plant Co, an agricultural business with a previously unblemished reputation, forged documents that allowed it to receive 140,000 yuan from the local government’s poverty-relief fund.

“When I asked why the local government had failed to realize the documents were fake, the officials said they trusted the company because it had operated in the county without a problem for eight years. They didn’t imagine the company would falsely claim money set aside for poverty relief, so they didn’t perform thorough checks on the documents it provided,” said Chen Xinyuan, an NAO auditor in Chengdu.

Foul play

Chen first suspected foul play during an overall audit of funds for anti-poverty projects, when she noticed an out-of-date stamp on a document related to a bank loan the company had obtained.

“The stamp gave the game away, because it was from the Gulin Rural Credit Cooperative, but that financial institution changed its name to the Gulin Rural Commercial Bank at least a year before the date given on the document,” she said.

Following Chen’s breakthrough, the case was handed over to the prosecuting authorities, who are now investigating.

Last year, intensive audits conducted by 140 NAO auditors from the Chengdu branch, resulted in 14 million yuan being recouped and returned to the national treasury. More than 49 million yuan has already been “reactivated” after sitting idle in local governments’ bank accounts for many months.

Observers claim the money wasn’t used because it would involve too much work for local officials. For example, to relocate villagers, officials from the local government have to first identify a suitable location and then visit people’s homes to persuade them to move.

However, if any householders complain or refuse to relocate, the officials’ workloads rise. That means many officials do not even consider using the funds to improve people’s lives.

Authorities are questioning 35 people in connection with the matter.

The scam in Gulin is just one in a long list of corrupt practices in the allocation and expenditure of funds intended for poverty-alleviation projects.

The National Audit Office has also uncovered cases where local governments used relief money to pay for lavish meals, bribe officials or to provide employees with illicit allowances.

Inspections extended

Building on the success of the audit in Gulin and several other counties, the Chengdu branch of the audit office has decided to impose a two-and-a-half-year extension to inspections in 36 counties in Sichuan that are classified as poverty-stricken.

In line with the government’s pledge to lift all rural poor out of poverty by 2020, the earnings of 12.4 million villagers across the country were raised above the national poverty line last year. However, 43.35 million people were still living in impoverished conditions at the end of December.

As the 2020 deadline draws nearer, central government departments are strengthening supervision to ensure funds are used as intended.

The Ministry of Finance and the State Council Leading Group Office of Poverty Alleviation and Development have begun a targeted inspection into the use and management of poverty-relief funds in 28 provinces and regions.

The inspection, which mainly focuses on funds allocated in 2015 and last year, will last until the end of June, and is aimed at uncovering irregularities in the allocation and use of funds for poverty relief, one of the central planks of government policy.

Last year, more than 19,000 people across the country were punished for corrupt practices related to the use of poverty-alleviation funds, according to the Ministry of Finance.

BY LIANG LUWEN