Billions of yuan meant for water conservation projects have been mismanaged or misused, according to a national audit report released yesterday.

Li Jinhua, head of the National Audit Office is seen in this file photo. [newsphoto]

The findings were based on a 2004 audit of 71.6 billion yuan (US$8.9 billion) in funds allocated for such projects during 2002 and 2003, or 77 per cent of the total amount, according to the National Audit Office.

Among the key findings:

More than 3.5 billion yuan (US$437.5 million) was retained for no sound reason and nearly 1.4 billion yuan (US$175 million) was used improperly.

Nearly 1 billion yuan (US$125 million) was spent on building hotels or given out as subsidies and bonuses to staff members in some projects.

Other government departments involved in the misuse of public funds returned 4.16 billion yuan (US$520 million) to the State coffers.

The departments also turned over 1.18 billion yuan (US$147 million) to the central budget and reallocated 11.76 billion yuan (US$1.47 billion).

The audit also unearthed 114 cases of suspected malpractice in the use of funds, leading to court sentences for 76 officials and administrative punishment for 213.

Ten of the 12 departments accused of falsifying their budgets have transferred 390 million yuan (US$48.75 million) in inflated expense claims to next year's budget.

On the brighter side, the audit office found satisfactory results with environmental protection along the Qinghai-Tibet railway.

To reduce the negative impact of the construction, 33 passageways all completed by June 2005 were built for wild animals to cross the railway.

According to the Institute of Zoology of the Chinese Academy of Sciences, the number of antelope using the passageways rose to more than 1,500 last year from 400 in 2003. The animals go to Hoh Xil, a traditional mating place.

The report said the government planned to spend 1.54 billion yuan (US$193 million) for environmental protection along the Qinghai-Tibet railway accounting for 4.6 per cent of the total investment on the project of which 1.45 billion yuan (US$181 million) had been spent by June 2005.

Construction of the 1,142-kilometre Qinghai-Tibet railway from Golmud to Lhasa, scheduled to be operational this summer, started in June 2001.

(China Daily 03/30/2006 page1)