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Audit Storm is a Paper Tiger

On July 18, the National Audit Office (NAO) released the 2006 central government's budget implementation review. Fifty-six agencies are involved with 46.8 billion yuan in "problem" capital, of which 35.78 billion yuan has been corrected. This is the most detailed budget correction report since the so-called "audit storm" began.

For one week, the EO had been gathering information on agencies in the report's list. But our questions were rebuffed, and blame-shifting and direct denial of responsibility left our journalists empty handed.


With funds designated for a beautification and expansion project, the General Administration of Customs constructed a row of new buildings. They are painted a cream-yellow, which clashes with the white walls of the original eastern building. There is a small plastic playground in the garden with planted trees. From the outside, there doesn't seem to be any other differences. The cost? According to the NAO report, 65 million yuan.

Our journalists repeatedly tried to contact the GAC's press office, but to no avail.

The following week, the EO contacted the Three Gorges Construction Supervision Bureau of the State Council, the Chongqing Immigration Bureau, the Ministry of Culture of the PRC, the National Supply and Marketing Office, the General Administration of Civil Aviation of China, and the State-owned Assets Supervision and Administration Commission of the State Council. Regarding similar questions, all replied with vague answers such as, "we don't know" or "we aren't clear".


Who is responsible? Since Li Jinhua became director of NAO, the public has been fatigued by a stream of "audit storms". Nevertheless, there has yet to be a "blame storm".

Government Functionary Law states that if a senior government employee's mistake or breach of duty result in serious injury to the public, they should step down. If not, the government should order their resignation. Recent high-level resignations have stemmed from deference to this law, but none have occurred on the heels of the "audit storm". On July 4, the State Council discussed budget appropriations, saying that that not only should misallocated capital be paid back or corrected, but also that responsibility should be investigated.

The EO found that from 2004 to 2006, the sum of capital appropriated against regulation during central government budget implementation, as uncovered by the NAO, was 9.06, 5.51, and 46.8 billion yuan for the three years respectively. One source from NAO says those funds did not reach their objectives because of improper management that was unintentional.

In the wake of the "audit storm", the NAO has provided clues to the Ministry of Public Security and the Ministry of Supervision for 28 criminal cases. But not one senior official has resigned or been fired.

China has recently seen investigations in administrative accountability after sudden, high-profile events. It can be traced back to the SARS period in 2003. After the epidemic’s cover-up, thousand of officials were investigated and removed, including the director of the Ministry of Health and two Beijing mayors.

Ma Fucai, general manager of PetrolChina, resigned after the blowout incident in Jing county, Sichuan province in December 2003. And Xie Zhenhua was dismissed from his position due to Songhua River pollution incidents in November of 2005. But only after memos reached the upper levels of government did accountability probes begin.

Fixing the System

Tangjun, a professor at the School of Public Administration, Renmin University, says that internal accountability probes are not as good as independent, third-party ones. The NPC or its standing committee, supervising agencies, the judiciary, democratic parties, the public, and the media should all be involved. According to one official from the NAO, the agency is an administrative body and its primary duty is to uncover malfeasance and specify a timeline for its rectification. Pinpointing accountability is beyond the scope of its duties.

Li Jinhua and other senior auditors are most eager to bind the auditing process to an accountability system. When questioned about his audits' "having thunder but no rain", Li has expressed his hopes of building up an accountability system, saying that he doesn't advocate audit storms because they seem like exercises or publicity stunts. The audits are part of a system, and measures to investigate accountability should also be systematized. It shouldn't take events like the fake baby milk powder deaths to spur on these big sweeps. Without this, audits will just continue to be paper tigers.

Some of those interviewed for this article say that the audit has pushed the issue of establishing such a system to the forefront of administrative reform. Experts say that the Government Functionary Law, which came out after the 16th national congress, was an initial step towards the goal of creating a government that is ruled by law within ten years. The 17th congress may continue to carry this torch for those hoping that the trend for more accountability continue.

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