'Serious problems' plague China's social security funds
Nov 23, 2006 - 10:33:43 PM
, Reviewed by: Priya Saxena
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State media said Shanghai officials illegally used about 3.2 billion yuan ($410 million) to fund speculative property deals.
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By DPA,
[RxPG] Beijing, Nov 23 (DPA) Chinese auditors have found 'serious problems' in management of regional social security funds, following a nationwide investigation that was prompted by a scandal over misuse of Shanghai's funds, the government said on Thursday.
'In some places, there exist problems including lax implementation of policies, poor management and even misappropriation and embezzlement,' said the report of a cabinet meeting to discuss problems with social security funds.
'Some problems are relatively serious and great attention should be paid to them,' said the report, which was posted on the website of China's State Council or cabinet.
The auditors found 'severe loopholes' but concluded that the use of social security funds was 'good in general'.
The cabinet agreed to tighten controls on the funds and ordered separate management of collection and expenditure.
It demanded 'enhanced transparency in fund management and public supervision' and higher returns on investments of social security funds.
China's social security funds totalled 1.84 trillion yuan (about $233.35 billion) at the end of 2005, the report said.
More than 50 people were reportedly detained over the last two months after about 10 billion yuan ($1.25 billion) was lost through illicit loans or investments from Shanghai's social security funds.
State media said Shanghai officials illegally used about 3.2 billion yuan ($410 million) to fund speculative property deals.
Shanghai Communist Party chief Chen Liangyu, an ally of former Chinese leader Jiang Zemin, was sacked in September for his role in the scandal, in what some analysts saw as a political move by President Hu Jintao.
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