Analysis: Poor oversight led to `state affairs fund' controversy

The ministry also said it was innappropriate for the Presidential Office to assign someone who was not a certified accountant to handle the special account.

The Directorate General of Budget, Accounting and Statistics (DGBAS), however, has a different view of the nature and function of the fund.

DGBAS defined the fund as a "special fund" and "secret fund" and as such it is not necessary to produce receipts or invoices if the fund is used for confidential purposes.

Accounting and Statistics Director-General Hsu Jan-yau (許璋瑤) said his department did not send auditors to check on the use of the fund because it "trusted and respected the national leader."

Chen has said that it was unfair to hold him accountable for the fund's poor controls since he merely followed the practice exercised by his predecessors.

Shih Cheng-feng (施正鋒), a professor at Tamkang University's Department of public administration, agreed that Chen should not be held solely responsible for the ill-designed system, but the administration should have taken the initiative to change the modus operandi as soon as it discovered the flaw.

It did not make sense, however, that the head of the state should go without a special allowance fund while other government officials use them, he said.

As Chen has complained that even government officials are confused about the nature of the fund and that nobody had explained how to use it, Shih said the Ministry of Audit should be held responsible for "procedural errors" relating to the "state affairs fund."

"While President Chen only oversees policies involving the funds, the relevant accountants are in charge of how the cash is handled," Shih said. "Many of the nation's problems lie in the lack of institutional transparency and legal mechanisms."

Philip Yang (楊永明), a political science professor at the National Taiwan University, however, said Chen was trying to turn a legal issue into a political one when he compared his use of the fund to that of his predecessors.

Even if part of the fund was normally used for clandestine diplomatic undertakings, it still should have been placed under legislative oversight, he said.

Yang's comments cast doubt on Chen's argument that presidents should have business expenses at their disposal because they set foreign policy rather than execute it.

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