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Announcement by the National Audit Office of the People’s Republic of China (CNAO) on the Audit Findings of Relief Funds and Materials Provided for th
2008-09-10日   Soure : :

Announcement

by the National Audit Office of the People’s Republic of China (CNAO) on the Audit Findings of Relief Funds and

Materials Provided for the Wenchuan Earthquake

                     

No. 2

( Announced on June 24, 2008)

In accordance with the demands set forth by the Central Committee of the Chinese Communist Party and the State Council in the wake of the Wenchuan earthquake, the CNAO lost no time in making plans for an all-round and whole-process follow-up audit of collection, distribution, appropriationemployment and supervision of earthquake relief funds and materials (shortened hereafter as relief funds and materials). Up to now, audit institutions at various levels nationwide have organized 10650 audit personnel to complete auditing 19850 departments and units, covering 19 central governmental departments and units, as well as 520, 4289 and 15022 departments and units respectively at provincial, prefecture and county levels. They also extended auditing 1068 small towns and 2451 villages in Sichuan, Gansu and Shaanxi—the 3 provinces most seriously stricken by the aforesaid earthquake. They made in-house investigations of 14587 earthquake-affected households. The funds audited in the 3 provinces have totaled RMB 28.946 billion yuan. Their audit objective is to promote security and integrity, fairness and justice, regularity and efficiency, order and standard, openness and transparency in the course of collecting, supervising and employing relief funds and materials as well as to ensure that no problems or only few problems will appear so as to report back to our people in clear terms and make them rest assured. Their audit scope mainly covers the relief funds and materials provided by the central and local financial organizations at different levels, funds and materials donated by all walks of life at home and the international community as well as “special party membership dues” voluntarily handed in by members of the Chinese Communist Party. To strictly enforce the discipline of audit work and ensure audit quality, the CNAO has made strict rules and regulations so as to enforce audit discipline of relief funds and materials. By opening and making public informants’ hot-line telephones and websites, CNAO has collected clues of problems for further verification.

According to the stipulations of The Audit Act of the People’s Republic of China and demands set in the Notice on Strengthening Supervision of Earthquake Relief Funds and Materials by the Central Commission for Discipline Inspection of the CPC, the Ministry of Supervision, the Ministry of Civil Affairs, the Ministry of Finance and the CNAO, the audit findings of relief funds and materials completed by 12 June are made public as follows:

I. Auditing on Relief Funds and Materials Provided by the Central and Local Financial Organizations

1. The Basic Situations on Provision, Appropriation, Supervision and Employment of Relief Funds and Materials

By 12 June, the earthquake relief funds provided by the central financial organizations has totaled RMB 19.009 billion yuan, of which RMB 10.4 25 billion yuan was directly provided as special item subsidies, RMB 6.985 billion yuan was provided by the such central departments like the Ministry of Communications and the Ministry of Health as well as relevant units, and funds for allocating grain in disaster-hit areas, purchasing wheat, temporary storage, market-supplying in disaster-hit areas, purchasing relief goods and materials and subsidies for education in these areas totaled RMB 1.599 billion yuan. In addition, 31 provinces and the Xinjiang Production and Construction Corps have provided financial relief funds and materials totaling RMB 6.591 billion yuan.

The financial relief funds of various levels accepted by the 5 most seriously hit provinces and city—Sichuan, Shaanxi, Gansu, Yunnan and Chongqing has totaled RMB 18.476 billion yuan, of which RMB 5.947 billion yuan was spent as follows—RMB 0.148 billion yuan as comprehensive financial subsidies, RMB 2.916 billion yuan as civil administration relief funds, RMB 0.472 billion yuan as medical care expenses, RMB 0.418 billion yuan as expenses for storing, allocating and transporting relief materials, RMB 1.003 billion yuan as expenses for doing rush repairs of infrastructure in the disaster-hit areas, RMB 0.483 billion yuan as expenses for education, public security, broadcasting and TV in the disaster-hit areas as well as RMB 0.507 billion yuan spent as other expenses.

2.  Auditor’s Comments

In the wake of this earthquake, the central government and local governments at various levels, which have responded with their firm leadership and quick action as well as effective measures and work transparency, rapidly readjusted the structure of their financial revenues and expenditures according to law. Central government departments and organizations are demanded for cutting down 5% of their public expenditure budgets in 2008, reducing expenses for meetings, receptions, travels on mission and use of public vehicles as well as numbers of delegations and groups for overseas visits; and limiting their purchase of public vehicles. Therefore, they have provided and appropriated huge amounts of relief funds and materials allocated and transported to the disaster-hit areas. To strengthen supervision of these funds and materials, the central government called a special working conference on supervision of the relief funds and materials, set up a leading group for this purpose and exercised an all-round supervision of these funds and materials. The Central Commission for Discipline Inspection of the Chinese Communist Party, the Ministry of Supervision, the Ministry of Civil Affairs, the Ministry of Finance and the CNAO has jointly issued “A Notice on Strengthening Supervision of Relief Funds and Materials”. On the other hand, relevant departments soon made such rules and systems for the aforesaid purpose as “An Emergency Notice on Strengthening Supervision of Purchasing Relief Goods for the Wenchuan Earthquake Hit Areas” and “Methods for Supervising the Funds of Building Transitional Resettlement Houses in the Earthquake-Affected Areas. These documents helped supervise the arrangement and employment of these funds and materials according to the principle of funds for specified purposes and for priorities only so that such basic needs of the people in the disaster-hit areas as clothing, food, housing and medical care and the foremost relief work to be smoothly carried out in these areas have been ensured in an effective way. According to the requirements of this relief work and reconstruction to be conducted in the wake of the earthquake, the central government has increased its input of financial funds.

Up to now, no major case in violation of law and discipline has been found in the course of this audit.

3. Rectifications of the Problems Found in Auditing

The following are the main problems found in the course of auditing relief funds and materials provided by financial organizations at various levels: supervision is not quite standard, policy not so perfect and nor is its execution in place.

a.       Some small towns and villages have failed to implement the relief policy “half a kilo of grain and RMB 10 yuan a day for a person”. Of 65 towns and villages in Wenchuan, Heishui, Maoxian and Lixian in Sichuan Province—the 4 most seriously earthquake affected counties—entitled to get tentative relief living allowances, for example, only 28 towns and villages have got them whereas none of towns and villages in Lixian got them due to traffic jam and difficulty in statistical check of effects of the disaster. The authorities of some towns and villages in Hanyuan County agreed to give relief subsidies and grain to their disaster-affected villagers on the condition that they must promise to pull down their earthquake-damaged houses. After this problem was found in the course of audit, the authorities in the aforesaid towns and villages have taken a positive attitude toward correcting and solving these problems according to the rules and regulations set by the state, and effective steps to carry out the relief policy at an early date.

b.       Aside from issuing consolation funds to the bereaved families of earthquake victims according to the state’s uniform stipulation, a few local authorities have issued local consolation funds to them. As there are no uniform criteria for issuing these local funds, it will inevitably lead to comparing with each other and create problems. The audit personnel have put forward suggestions to the relevant departments and the latter are studying with the local counterparts ways to perfect policy measures concerned.

c.       Very few local governments have got extra financial subsidies. For instance, due to their traffic and communication blockage, difficulty in checking effects of the disaster and statistical mistakes, some towns and villages in Hanyuan County got an extra financial subsidy of RMB 13.33 million yuan and extra subsidized grain of 665.000 kilos as a result of their repetitive statistics and false reports. After this problem was found in the course of audit, the departments concerned in Hanyuan County are reexamining effects of the disaster and will hand over the aforesaid financial subsidy and relief grain after they have done the job and further investigation has been carried out.

d.       The relief funds provided to the disaster-hit areas by some government departments and financial-allocating units are actually their own funds. The fact that these funds have been classified as donations from the society by statistics resulted in irregular statistics of relief funds and materials. After this problem was found in the course of audit, departments concerned are doing statistical work of the aforesaid funds according to their actual categories and making their statistics regular step by step.

II. Auditing on Relief Funds and Materials Donated by Society

1. The Situations of Acceptance, Appropriation, Supervision, Employment, Balance and Inventory of Donated Funds and Materials

a.       Acceptance, Appropriation, Employment, Balance and Inventory of Donated Funds and Materials by the Central Government and Areas Not Affected by the Earthquake

By 12 June, the donated funds and materials accepted by the central government and areas not affected by earthquake have totaled RMB 45.297 billion yuan, of which RMB 13.487 was spent and RMB 31.810 billion yuan is the balance. The following are the details:

(1)  AcceptanceAppropriation, Employment, Balance and Inventory of Donated Funds and Materials by the Central Government Departments and Units

The 15 audited central government departments and units have accepted RMB 10.944 billion yuan of donated funds and materials (donated funds accepted on account are RMB 9.906 billion while donated materials received are worth RMB 1.038 billion yuan). Of the aforesaid sum, the Ministry of Civil Affairs accepted RMB 1.857 billion yuan; the Red Cross Society of China and the Red Cross Foundation of China accepted RMB 4.538 billion yuan and the Chinese Charity Society accepted RMB 0.899 billion yuan while the Ministry of Foreign Affairs, the Ministry of Commerce, the Ministry of Health, the United Front Work Department of CCCPC and the Office of Overseas Chinese Affairs accepted RMB 2.054 billion yuan in total and social groups and public-donations foundations like the Cross-Straits Relations Association of China and the Chinese Poverty Alleviation Foundation accepted RMB 1.596 billion yuan.

Of RMB 4.346 billion yuan of relief funds and materials already appropriated and employed, RMB 2.341 billion yuan was appropriated to Sichuan, RMB 0.256 billion yuan to Shaanxi, RMB 0.314 billion yuan to Gansu, RMB 38.25 million yuan to Chongqing, RMB 4.40 million yuan to Yunnan and RMB 2.10 million yuan to Guizhou while relief commodities worth RMB 0.785 billion yuan directly purchased were delivered to the disaster-hit areas and RMB 0.5 billion yuan appropriated to the Red Cross Society of both Shanghai and Guangdong were for building transitional resettlement houses in these areas. According to its overall arrangement, the Chinese Red Cross Foundation appropriated out of the donated funds accepted by the State-owned Assets Supervision and Administration Commission of the State Council RMB 66.268 million yuan to the East Power Group Company, RMB 10 million yuan to the enterprises affiliated to the Chemical Industry Group of China, RMB 10 million yuan to the Water-Control and Hydro-Power Construction Group Company of China and RMB 10 million yuan to Railway Construction Company of China. Other expenses amounted to RMB 9 million yuan.

By 12 June, the balance and inventory of the donated funds and materials have amounted to RMB 6.598 billion yuan, of which those of the Ministry of Civil Affairs reached RMB 1.208 billion yuan, those of the Red Cross Society of China and the Red Cross Foundation RMB 3.226 billion yuan, those of the Chinese Charity Society RMB 0.234 billion yuan, those of 5 ministries including the Ministry of Commerce RMB 0.982 billion yuan and those of social groups and public-donations foundations like the Cross Straits Relations Association of China and the Chinese Poverty Alleviation Foundation RMB 0.948 billion yuan.

(2) Acceptance, Appropriation, Employment, Balance and Inventory of Donated Funds and Materials by Areas Not Affected by the Earthquake 

The donated funds accepted by 26 provinces (regions and municipalities) not affected by the Wenchuan earthquake and the Xinjiang Production and Construction Corps have totaled RMB 29.779 billion yuan. Of the aforesaid funds, RMB 9.040 billion yuan was accepted by the civil affairs departments of these provinces (regions and municipalities), RMB 8.154 billion yuan by their Red Cross societies, RMB 12.246 billion yuan by their charity societies, RMB 0.260 billion yuan by their foundations and RMB 79 million yuan was accepted by their other administrative undertakings.

The donated materials of various kinds accepted by the aforesaid provinces (regions and municipalities) are worth RMB 4.574 billion yuan.

RMB 9.141 billion yuan of the aforesaid donated funds and materials has been spent—RMB 1.113 billion yuan spent for rescuing and treating the injured and sick people in the disaster-hit areas as well as delivering donated materials, and RMB 8.028 billion yuan appropriated to the disaster-hit areas (RMB 7.414 billion yuan to Sichuan, RMB 0.302 billion yuan to Shaanxi, RMB 0.274 billion yuan to Gansu, RMB 7.25 million yuan to Yunnan and RMB 31.3278 million yuan to Zhongqing). The balance totals RMB 25.212 billion yuan.

2. Acceptance, Appropriation, Employment, Balance and Inventory of Donated Funds and Materials by the Earthquake-Affected Areas

The donated funds and materials actually accepted by the 5 earthquake-hit provinces and municipality (Sichuan, Gansu, Shaanxi, Chongqing and Yunnan) have totaled RMB 15.039 billion yuan (including the donated funds and materials donated by these provinces and municipality and appropriated by other provinces, regions and municipalities). Of this sum RMB 10.651 billion was accepted by Sichuan, RMB 1.516 billion by Gansu, 1.326 billion yuan by Shaanxi, RMB 0.816 billion yuan by Chongqing and RMB 0.73 billion yuan by Yunnan.

Of the aforesaid funds and materials, RMB 3.551 billion yuan (donated funds--RMB 1.189 billion yuan and donated materials worth RMB 2.362 billion yuan) has been already spent—RMB 2.119 billion yuan spent by Sichuan, RMB0.681 billion yuan by Gansu, RMB 0.302 billion yuan by Shaanxi, RMB0.298 billion yuan by Chongqing and RMB 0.151 billion yuan by Yunnan. The balance totals RMB 11.488 billion yuan.

2. Auditor’s Comments

In the wake of the Wenchuan earthquake, the large amounts of relief funds and materials timely and quickly donated by people from all walks of life in China, compatriots of Hong Kong, Macao and Taiwan, overseas Chinese and foreign citizens of Chinese origin as well as the international community has rendered the masses of people in the disaster-hit areas a strong support to tide over their difficulties. The State Council issued “The Notice on Strengthening Supervision and Employment of Donated Relief Funds and materials for the Wenchuan Earthquake-Hit Areas”.

Funds and Materials for the Wenchuan Earthquake and the responsible departments concerned lost no time in making more than 10 statutes and regulations related to acceptance, supervision and employment of donated relief funds and materials. The main organizations for accepting these funds and materials have done their duty and enforced relevant rules and regulations in earnest so that supervision of donated funds and materials has been strengthened, information-open system established and income and expenditure of donated funds and materials made known through their networks. As they have a relatively sound system to supervise relief funds and materials, civil affairs departments, Red Cross societies and charity societies have formed a strict procedure for approving acceptance and appropriation of funds and materials as well as an appropriation process and an effective mechanism for internal restriction so that their supervision over acceptance of donated relief funds and materials is relatively regular. Giving priority to supervision of donated funds and materials, local governments and departments at various levels have revised and perfected ways for supervision by integrating them with their local conditions and Sichuan alone worked out 12 ways for supervision. The tearing hurry in supervising donated funds and materials at the beginning stage of the rush to meet an emergency of the earthquake has gradually given way to orderly and effective rules and regulations in doing so. The employment of donated funds and materials has generally met the actual requirements of the disaster-hit areas.

By now, no major case in violation of law and discipline has been found in the course of audit.

3. Rectifications of the Problems Found in Auditing

In the course of auditing donated funds and materials, it is found that some local governments and departments have committed irregularities in collecting, supervising and distributing donated funds and materials and that a few individuals are suspected of violating discipline and law.

a. Work of some local governments and departments such as supervision of donated funds and materials at the beginning stage of sending them to the disaster-hit areas was not quite regular. The factor that large amounts of donated funds and materials in various kinds have swarmed into the disaster-hit areas in a short time from many sources coupled with the fact that the relevant departments and local governments have yet to establish sound systems and that they lack the experience in supervising such an emergency caused the following problems—registration of donated funds and materials behind the real time, lack of sound procedures and strict quality-check, inaccuracy of statistical data, repetition and evasion of reports, payment of compensation without grounds or standards, impeded-flow of information on supply and demand of relief funds and materials, overstock and even waste of some materials and their storage in violation of rules and regulations. After the aforesaid problems were found in the course of audit, suggestions related to 12 aspects were put forward to the local governments and departments concerned. The latter promptly took steps in response to these problems and the audit recommendations, drew up and perfected their relevant systems. With continuous improvement of the system to supervise relief donations, the local governments and departments concerned are correcting and solving their problems.

b. The overall plan of donated funds from the society accepted by the areas not affected by the Wenchuan earthquake that were to be handed over to the central departments and units or appropriation of these funds to the disaster-hit areas was not well-timed and therefore there is much cash on hand. These funds should have been appropriated to the disaster-hit areas in good time, but by 12 June their balance amounting to RMB 24.371 billion yuan has still remained in their accepted areas. The aforesaid balance, making up for 81% of the total donated funds, has not been handed over in time to the central departments and units to make overall plans or be appropriated correspondingly to the disaster-hit areas. After this problem has been found in the course of audit, the aforesaid areas are actively studying with the relevant central departments and units ways to step up overall arrangement of this balance.

c. Some donated materials are divorced from the actual demands of the disaster-hit areas. For instance, some health care medicines like pills for preserving men’s sperms accepted by Gansu have been left unused by now. 17350 tourist tents accepted by Beichuan of Sichuan, the commercial bureau of Pengzhou and the Baoji civil affairs bureau of Shanxi have been kept too long in stock due to their too narrow interior space.

As the relief work has turned from rush to meet an emergency of the earthquake to resettlement in the wake of the disaster, there appears a phenomenon of both structural “redundancy” of some donated materials and shortage of some other materials. For instance, mineral water, instance noodles, medical injections and injectors accepted by some areas have been let lie idle. As expiry dates for some donated food and materials will soon be due, losses and waste of these food and materials is inevitable if they are not dealt with in time.

After the aforesaid problems have been found in the course of audit, departments concerned are studying active and proper ways to solve them.

d. Very few donated materials are of inferior quality, For instance, some underclothes and shirts among the second-hand garments accepted by Gansu from other places have a hidden danger of hygienic safety. 38 tons of disinfectants like “disinfectants of hydrogen oxide” accepted by the health-care bureau of Sichuan are products of “3 have-nots”. 1000 kilos of food accepted by Wenchuan County and over 1800 bundles of mineral water accepted by Deyang City are disqualified. 15981 tents out of all the tents accepted by the disaster-hit areas of Sichuan and Gansu either lack accessories or fail to form complete sets and therefore, 2667 tents accepted by Wenchuan County alone are left unused, making up for 20% of all the tents accepted by this county. According to audit recommendations, relevant departments are taking positive steps in an effort to solve these problems as soon as possible.

e. Supervision of some donated funds and materials is not regular. Firstly, some donated materials were missing or lost in the process of appropriation and acceptance. For instance, 6200 boards accepted by Tianshui—a relief materials transfer post of Gansu--on 30 May were promptly transported to Longnan City without any check, and therefore, the city’s civil affairs bureau received only 1790 boards. Secondly, there was no uniform statistical version for accepting donated funds and materials. For instance, different calculating units were used for counting donated materials of the same kind due to the fact that responsible departments and organizations failed to make uniform regulations in time for ways to calculate and appraise relief materials, and though quantity of some donated materials was counted, their price was yet to be estimated. The aforesaid factors have affected accurate statistics, scientific and equitable distribution-appropriation-employment of these materials. Thirdly, some donated funds were not deposited as a special account according to regulations. For instance, the Sichuan commercial bureau kept relief funds of RMB 38 million yuan appropriated by the Ministry of Commerce in its own appropriation account pending further arrangement. The departments concerned have taken corresponding steps according to audit recommendations to strengthen their supervision.

f. A few departments failed to bring non-directional donated funds they accepted into supervision of special accounts and some of these funds were appropriated directly to their own subordinate units in the disaster-hit areas as relief funds. The departments concerned have taken regular measures according to audit recommendations.

g. It is found in the course of audit that the main leading member of the Federation of Industry and Commerce of Anyang County in Henan Province was suspected of 8 cases in violation of law and rules like abusing his power for personal gains. He was removed from his post after the CNAO made public his problem of abusing his power for personal gains on 12 June and the department concerned has started an investigation into his case. As his other problems are under further check, their findings will be made known later.

III. Auditing on “Special Party Membership Dues”

In the wake of the Wenchuan earthquake, numerous members of the Communist Party across China voluntarily handed in “special party membership dues” in aid of the disaster-hit areas. Of “the special party membership dues” of RMB 5.019 billion yuan accepted by the Organization Department of the CCCPC on its account by 12 June, RMB 1.2 billion yuan was appropriated to the disaster-hit areas—RMB 1 billion yuan to Sichuan, RMB 0.1 billion yuan each to Gansu and Shaanxi. Of audited “special party membership dues” of RMB 6.503 billion yuan accepted by the party organizational departments of 31 provinces (regions and municipalities) and the Xinjiang Production and Construction Corps, RMB 4.381 billion yuan was handed over to the Organization Department of the CCCPC, RMB 22.50 million yuan to the party organizational departments of their superior responsible units by the central enterprises’ subordinate organizations, and RMB 2.099 billion yuan has been deposited in bank by local party organizational departments to be handed over later.

To improve collection, employment and supervision of “special party membership dues”, the Organization Department of the CCCPC has set up a special working group responsible for collection and supervision of these dues, a special account and a reception center for accepting “the special party membership dues” handed over by local party organizations and individual party members across the country. It also drew up stipulations like “Tentative Ways for Collecting, Employing and Supervising ‘Special Party Membership Dues’ for Earthquake Relief”, and made public in time the collection and employment of these dues to accept society’s supervision. Local party organizations at various levels also took corresponding steps to improve and normalize their supervision. No problem in violation of disciplines and rules has been found in the course of audit, but a few units have such a problem of irregularity in dues-depositing and-checking. According to audit comments and recommendations, the units concerned are taking measures to implement in earnest various stipulations on supervising and employing “the special party membership dues”.

IV. Audit Recommendations

According to its audit findings completed at the previous phase, the CNAO has made the following suggestions

1. A nationwide network of open-information on relief funds and materials for the Wenchuan earthquake should be open as early as possible so as to make public on line collection, appropriation, distribution, employment, balance and inventory of relief funds and materials supervised by the relevant departments, information on donors and donating units (excluding the donors who want to remain anonymous) as well as information on demand for relief materials.

2. As the relevant department to supervise donated funds and materials from the society, the Ministry of Civil Affairs should enforce as soon as possible rules and regulations like “Notice on Improving Supervision and Employment of Donated Funds and Materials for the Wenchuan Earthquake Relief Issued by the General Office of the State Council”, regulate the order for collecting funds and materials and make public by means of mainstream media lists of qualified groups and organizations for accepting social donations approved by the civil affairs departments. At the same time it should clear up as early as possible the amounts of directional and non-directional donated funds already kept on account, purpose setup of directional funds and allocation of their appropriated areas.

3. The Ministry of Finance, the Ministry of Civil Affairs and the State Development and Reform Commission should further improve their overall coordinated system for distributing and employing relief funds and materials, specify their policy for aiding and resettling disaster-affected people and learn promptly the actual demands for relief funds and materials by the disaster-hit areas so as to be able to make macro scientific arrangements and micro reasonable preparations. With regard to post-disaster reconstruction in particular, they should arrange strict appropriation of financial and socially donated funds according to the two documents—“Regulations on Restoration and Reconstruction in the Wake of the Wenchuan Earthquake issued by the State Council” and “ Principles to Guide Employment of Donated Funds for the Wenchuan Earthquake Relief Set by the General Office of the State Council” so as to prevent over-concentration of appropriations, detention, loss and waste of funds and further improve the efficiency of employing relief funds and materials as well as funds for post-disaster reconstruction.

As the focus of relief work has gradually turned into post-disaster restoration and reconstruction, the CNAO will further readjust and emphasize audit priorities, audit without delay collection, appropriation, allocation, supervision and employment of funds for post-disaster restoration and reconstruction, continue to severely deal with major problems both in violation of law and regulations as well as of loss and waste, step up audit of the efficacy of allocating and employing relief funds and materials, continue to enforce the system of making public audit findings at a regular period and make known to the society the major problems as soon as they have been found so as to let the broad masses of people learn immediately both supervision and employment of relief funds and materials and their audit and exercise supervision accordingly.