Auditors in Guangdong have found that 5.38 billion yuan ($689.74 million) worth of public funds were spent illegally last year, an official with the provincial auditing department said.

Of that amount, auditors said 1.09 billion yuan ($139.74 million) had been wasted.

The authorities have ordered the involved officials to recover 950 million yuan ($121.79 million) of the misspent money.

Huang Xuerong, an official with the provincial auditing department, said auditors investigated 5,261 official bodies, including government organizations, State-funded public service organizations and state-owned enterprises last year. Their efforts saved the province 1.85 billion yuan ($237 million).

He said funds originally marked for education, government spending and investment in rural development and other projects had been embezzled and wasted.

"Embezzlement of funds meant to pay for compulsory elementary and secondary school education was one of the biggest problems we uncovered," Huang said.

Embezzlement was particularly serious in the comparatively less-developed northern, eastern and western parts of the province.

Special funds that should have been used to pay for daily operations, maintenance and lab facilities at schools in those areas were instead appropriated to pay teachers and civil engineering project contractors.

The province had earmarked 3.1 billion yuan ($397 million) worth of special funds to support the provision of compulsory education for 9.6 million elementary and secondary school students in rural areas last year.

Huang did not say how much money from the special fund had been misused.

During a provincial auditing work conference yesterday, Guangdong Vice-Governor Zhong Yangsheng said the provincial auditing system would expand to cover fiscal budgets at all levels this year to make sure that public funds are used legally.

Massive projects, special funds for the improvement of people's lives and the operation of state-owned enterprises and banking institutions will be under particular close supervision.

(China Daily February 2, 2007)