Chinese auditors find US$35 billion in misspent funds

Chinese auditors have uncovered 290 billion yuan (US$35 billion) in funds illegally spent by government offices in the first 11 months of this year, state media said yesterday.

The improper spending was found during a nationwide annual audit of 22,000 officials by the National Audit Office, Xinhua news agency said.

Details were not given but previous findings about misspending involved officials using public funds to build apartments for employees or to give themselves bonuses.

About 196 of the officials were disciplined by their superiors or prosecuted in court, the report said, which cited sources with a national audit conference that opened in Beijing yesterday.

The annual audits are an attempt by the government to stem a rising tide of corruption, which is tarnishing the Communist Party's image and fueling ordinary people's anger against the government.

Next year, the audit authority plans to scrutinize some of the branch offices of China's biggest commercial banks, the Bank of China, the Bank of Communications and the China Merchants Bank, Xinhua said.

Corruption is endemic in China and has grown during its economic reform period, threatening the legitimacy of the communist government, the Organization for Economic Cooperation and Development (OECD) said earlier.

In a report, the OECD said corruption represented between 3.0 and 5.0 percent of China's gross domestic product, or between 409 and 683 billion yuan last year.

China's state audit report for last year showed that 9.06 billion yuan was misappropriated by central government departments and 14.5 billion yuan was improperly spent by top state companies.

It was unclear why the amount of embezzled funds found this year was so much greater than last year, but not all of the misused funds identified last year were included in last year's report.