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Updated: 2007-06-28 11:20

The nation's top auditor said yesterday that embezzled or misappropriated central government funds cost taxpayers nearly 7 billion yuan ($919 million) last year, while more than 37 billion yuan ($4.86 billion) was poorly managed.

In his annual audit report to the country's top legislature, Auditor-General Li Jinhua accused 56 central government departments of misappropriating 1.52 billion yuan ($200 million); and 434 subordinate units of 5.35 billion yuan ($700 million).

Li said the National Audit Office (NAO) had also found "managerial irregularities" involving 37.28 billion yuan ($4.9 billion) in central budgetary funds.

Another 2.73 billion yuan ($360 million) was squandered or wasted, he said while reporting to the Standing Committee of the National People's Congress.

Eleven central departments were named as violators, including the ministries of education, health, the State Environmental Protection Administration, the General Administration of Press and Publication, the State Tobacco Monopoly Administration and the State Information Center.

In particular, 92 subordinate agencies of 25 central departments including the Ministry of Culture and the National Development and Reform Commission, were blamed for misappropriating 2.75 billion yuan ($361 million), accounting for 40 percent of the total misused money.

Figures released yesterday show that 28 officials have been detained in cases relating to last year.

For problems reported last June, 177 people have been penalized and 94 arrested, prosecuted or sentenced.

Misused State funds in 2004 and 2005 were 9.06 billion yuan ($1.18 billion) and 5.51 billion yuan ($720 million), according to the NAO.

Probes in 29 provinces revealed a total of 7.1 billion yuan ($930 million) of misappropriated social securities funds.

Li said central government departments have become more adept at handling budgets, but more reform measures are needed to better manage budgetary allocations.

It is also necessary to better manage and supervise the social security funds, he noted.

Li has made a name for his courage to air the government's dirty laundry in public. Every summer since 1999, his audience has been eagerly awaiting the "audit storm" when he reports to the legislature.

Major audit rule violations

The Ministry of Finance failed to return 17.4 billion yuan ($2.3 billion) of untapped project funds to the central budget.

19 central departments, including the Ministry of Education and the State Tobacco Monopoly Administration, were involved in budgetary irregularities worth 19 billion yuan ($2.5 billion).

33 departments, including the South-to-North Water Diversion Office and the General Administration of Customs, misappropriated 859 million yuan ($113 million).

15 departments, including the All-China Federation of Supply and Marketing Cooperatives and the Press and Publication Administration, misappropriated 394 million yuan ($51.7 million) by hiding revenue or fabricating expenditure.

92 agencies under 25 central departments, including the Ministry of Culture and the National Development and Reform Commission, misappropriated 2.75 billion yuan ($361 million).

50 agencies under 13 departments, such as the Ministry of Water Resources, were involved in improper investment of 2.28 billion yuan ($300 million).

Five agencies under four departments, including the General Administration of Civil Aviation and the Ministry of Information Industry, misused 1.74 billion yuan ($228 million) by inflating budgets.

33 agencies under 23 departments, including the Ministry of Labour and Social Security and the State Electricity Regulatory Commission, illegally made 591 million yuan ($78 million) by hiding income or fabricating expenditures.