Audit exposes huge welfare fund abuse

Chinese authorities are taking steps to address significant issues involving billions of yuan in work-related injury insurance and maternity support funds, according to a report under review by China's top legislature.

This effort is part of a broader initiative to protect citizens' livelihoods.

The annual audit report, presented by Auditor-General Hou Kai to the Standing Committee of the National People's Congress on Tuesday, evaluated the implementation of the central government's 2025 budget and overall fiscal management.

The report highlights irregularities, including fraud, embezzlement, and the misappropriation of public funds in critical areas like childcare, education, employment, healthcare, elderly care, housing, as well as disability assistance.

Auditors identified problems involving nearly 4.87 billion yuan ($715.8 million) in the audited work-related injury insurance funds.

Nearly 3.97 million high-risk industry workers were found to be either uninsured or covered at unlawfully reduced standards. By the end of September, 34,100 construction projects across 24 provinces had failed to insure 2.26 million migrant workers, resulting in 2.53 billion yuan in unpaid premiums.

Auditors discovered that since 2013, 580 injured workers or their employers across 22 provinces fraudulently obtained 48.13 million yuan in compensation through fabricated accident reports and falsified medical records.

In respect of maternity insurance funds and subsidies, auditors identified issues involving 1.08 billion yuan, affecting the rights of over 1 million people. For example, 21,000 individuals across 21 provinces were denied 103 million yuan in benefits due to policy implementation gaps and miscalculated leave entitlements. Additionally, 496 employers in 13 provinces intercepted 30.05 million yuan in benefits meant for 3,511 employees.

"These irregularities have undermined citizens' sense of well-being and their tangible gains from social policies," the National Audit Office said on Wednesday. The office emphasized the need for expanded audit oversight across all sectors affecting livelihoods, with a particular focus on grassroots welfare.

The report also scrutinized fund usage in agriculture, finance, and natural resources. In one case, a wetland protection project falsely reported completion of relocation housing, with only 7,700 of over 27,000 people relocated, while garbage and sewage issues persisted.

Another case revealed that 135 agricultural technology projects in 92 counties, funded with 516 million yuan, were either misused for exhibition or entertainment purposes or remained idle.

The National Audit Office pledged to increase follow-up inspections and oversight to ensure proper resolution of the identified issues. A comprehensive update on rectification progress is scheduled to be released by year-end.

caoyin@chinadaily.com.cn