China's Auditor-General Li Jinhua has said that embezzlement and fraud were found in central budget implementation after completion of the audit of the 2003 budget implementation in 55 ministries and commissions under the State Council.

In an auditing work report on implementation of the 2003 central budget to a meeting of the Standing Committee of the National People's Congress (NPC) Wednesday, Li disclosed that

seven ministries obtained a total of 96.73 million yuan by cheating on their number of work staff and fabricating construction projects.

The auditing work report also said altogether 41 ministries and commissions under the State Council embezzled as much as 1.42 billion yuan of funds dedicated to special projects and used to construct residence and office buildings for their own departments.

Li raised an example, saying that since 1999, the State General Administration of Sport embezzled 131 million yuan from the country's Olympic special funds for building its own residential community, distributing subsidies to officials and opening up its own companies.

Li said in his report that insufficient use of the central budget was another big problem. By the end of 2003, the Ministry of Finance allocated 3.114 billion yuan for their budgeted

construction projects. However, only 1.261 billion yuan was used, leaving another 1.853 billion yuan or 64.74 percent unused.

Disaster relief funds improperly used

Chinese state auditors in 2003 discovered serious financial malpractice in use of disaster relief funds, said the auditor-general.

Investigations show that nine of the 14 flood-hit counties in the Huaihe River Valley, which were in central China's Henan Province and east China's Anhui and Jiangsu provinces, grafted 136 million yuan (16.4 million US dollars) from the disaster relief fund, accounting for 19 percent of the compensation fund for house reconstruction in the area.

Huoqiu County in Anhui Province embezzled 3.6 million yuan (0.4 million US dollars) which should have been distributed to 1,804 households for house construction.

In Funan County of Anhui, 17 cadres from three towns pocketed 200,000 yuan (over 24,180 US dollars) earmarked by the central government for the resettlement of people in the flood discharge area.

The same problem was also found in southwest China's Yunnan Province in earthquake relief, said Li.

Investigations show that by the end of March this year, the central finance department had earmarked 120 million yuan ( 14.5 million US dollars) to earthquake-hit areas in Yunnan. But up to now, still 51.74 million yuan (6.2 million US dollars) was still kept in the county finance. Some departments even used the relief fund to balance the local budget or build restaurants.