Date
19 November 2017
Government programs aimed at raising the people's living standards will not succeed if the billions of yuan allocated to implement them are not properly used. Photo: Xinhua
Government programs aimed at raising the people's living standards will not succeed if the billions of yuan allocated to implement them are not properly used. Photo: Xinhua

POLICY WATCH: Fiscal audit plays crucial role in reforms

As China pursues its economic reforms, the need to closely monitor the use of public funds cannot be over-emphasized.

Government programs aimed at raising the people’s living standards will not succeed if the billions of yuan allocated to implement them are not properly used or, worse, if the money ends up in some corrupt officials’ bank accounts.

It is for this reason that Premier Li Keqiang {李克強} has urged auditing authorities to improve supervision over the use of public funds, especially those earmarked for livelihood programs.

Violations such as misappropriation and embezzlement of public funds will be severely punished, Li told a national audit conference, according to a statement posted on the State Council website on Jan. 9.

“The country should make funds related to people’s livelihood a red line that no one can cross and no one will dare to cross,” Li said.

Underlining the role of audit in combating corruption, the Premier said auditing should cover all of the country’s fiscal funds, and bring all departments and projects using the money under the supervision of auditing organs.

For too long, the lack of external and independent audit has allowed corrupt officials to take advantage of their positions and acquire ill-gotten fortune at the expense of livelihood programs for which the funds were intended.

Ma Jun, a professor of public governance at Sun Yat-sen University in Guangzhou, said many corrupt officials were exposed in the course of auditing procedures.

Liu Jiayi {劉家義}, head of the National Audit Office, said on Dec. 27 that audit authorities found more than 970 clues to corruption cases and transferred these to judicial authorities between January and November 2013.

A clue offered to the disciplinary watchdog resulted in the investigation into former railways minister Liu Zhijun {劉志軍}, who was later sentenced to death with a two-year reprieve for bribery and abuse of power.

The auditing body has completed investigations into 19 cases of corruption and embezzlement involving senior officials of the government and the Communist Party as well as top executives of state-owned enterprises.

In the first 10 months of 2013, at least 357.8 billion yuan (US$59.19 billion) was returned to the government as a result of such investigations.

In his speech, Li urged agencies to keep a close eye on the construction of government buildings, noting that he had pledged in March last year that the government would not approve any new projects for government buildings.

On the other hand, government departments should boost financial input into renovation of blighted neighborhoods, energy conservation, environmental protection, improvement of public services, urban infrastructure construction and programs to boost consumption.

Li also told auditors to strengthen their vigilance over the financial system to prevent potential risks and revitalize capital.

An efficient audit mechanism, which makes use of a comprehensive computer system, should be able to detect potential financial risks at an early stage and help banks to prevent losses. For example, the tight liquidity in the interbank market late last year could have been prevented had commercial banks been vigilant in spotting risks of problematic loans amid rapid credit expansion.

– Contact the reporter at [email protected]

CG

    EJ Insight writer

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