The Chinese government is to launch a three-year audit campaign of the country's huge social security funds to deter and detect misappropriation.

Auditors would inspect the five social security funds of the basic company endowment insurance, basic medical insurance for urban workers, unemployment insurance, work-related injury insurance and childbearing insurance, source with the National Audit Office (NAO) told Xinhua.

They would focus on the collection and spending of funds, as well as management.

The occurrence of widespread embezzlement has been attributed to inadequate laws, a lack of transparency and inadequate public supervision.

Five nationwide audits of social security funds have been conducted since 1998, revealing embezzlement in 16 of the 31 provinces in 2004 and 1.7 billion yuan misappropriated in 2005.

Last year, the NAO discovered 7.1 billion yuan (816 million U.S. dollars) in misappropriated social security funds, either illegally borrowed, used or deposited.

The highest-profile case involved Chen Liangyu, the Party chief of Shanghai, who is accused of misappropriating three billion yuan.

However, some experts were pessimistic about the effectiveness of such campaigns.

"Auditing is relatively ineffectual as it only detects misuse of funds that have already occurred," said Tang Jun, a researcher with the Chinese Academy of Social Sciences.

"If the government could figure out better ways for the funds to invest with proper regulations, embezzlement would be curbed more effectively," Tang said.

At the end of 2006, the social security funds totaled 282.8 billion yuan, with a 71 billion rise year-on-year.

China's pension funds are expected to raise 56.6 billion yuan this year. Premium revenue from medical insurance will reach 183.5 yuan and unemployment insurance 35.3 billion yuan.

Source: Xinhua