Government auditors will keep a close eye on the drain of State
assets when scrutinizing the accounts of key State firms and banks,
Li Jinhua, auditor-in-chief of the National Audit Office, promised
Tuesday.
Li
said his office will "pay special attention to ensuring the safety
and effectiveness of State assets and preventing losses of State
properties" after the reform of the State asset-management
system.
China is considering a major reform of this system, under which
ownership rights would be divided among the central and local
governments. Specialized entities would be set up and would take
over State asset-management functions from various ministries.
Li
said that the experience of last year's auditing showed that
mistakes in decision-making and poor management of State firms had
led to huge losses of State property.
The National Audit Office reviewed 12 key State firms last year.
They lost 7.23 billion yuan (US$871 million) worth of State
property through malpractice when providing financial guarantees to
other firms, making blind investment or lending to other companies.
One of the State companies, which Li refused to name, lost 984
million yuan (US$118.6 million).
To
better protect State assets, the auditing will focus on checking
the authenticity of accounting information provided by State firms,
Li said.
Li's office discovered that 32 per cent of the 12 audited State
firms' claimed profits for 2001 were falsified. Overall, government
auditors reviewed 104,000 institutions in the first 11 months of
last year. They spotted malpractice involving 205.2 billion yuan
(US$24.7 billion).
Last year, auditors scrutinized the balance sheets of the China
Construction Bank and Agricultural Development Bank of China and
their branches nationwide.
Auditing of the two banks uncovered evidences used in the
prosecution of 51 economic crime cases, which involved 74 bank
officials and 2.274 billion yuan (US$274 million).
The National Audit Office picks one or two of the major State banks
for auditing every year. This year, it will review the books of the
Industrial and Commercial Bank of China and China Life Insurance
Co.
The State Administration of Taxation and the General Customs
Administration will also be examined by the National Audit Office
this year, Li added.
Li
also said that economic responsibility auditing on officials
retiring or moving to new posts will be deepened this year.
(China Daily January 22, 2003)