400 Million Yuan of Post-disaster Reconstruction Funds Misused in Henan: Audit Report

Credit: Visual China

BEIJING, Aug 9 (TiPost) —— The Henan Provincial Audit Office has found that more than 400 million yuan of funds for post-disaster reconstruction were misappropriated or misused.

The audit office carried out follow-up audits on Henan’s post-disaster recovery and reconstruction for two consecutive years after the province was hit by rare rainstorms and massive flooding in July 2021.

The two counties’ financing platforms kept reconstruction funds, and the quality of some of the completed projects was not up to standard.

According to the 2022 annual audit report recently released by the Henan Provincial Audit Office, the post-disaster recovery and reconstruction audit focused 44 counties that had been severely affected by the disaster. The audit found that Qi County and other nine counties and a provincial enterprise kept 405 million yuan of post-disaster restoration and reconstruction funds, Weihui and the other two counties’ financing platform companies kept 30.9128 million yuan of post-disaster restoration and reconstruction funds. Boai and other 24 cities and counties have 162 projects behind schedule, involving 3.127 billion yuan of planned investment. Four cities and counties such as Duochuan falsely reported that 22 projects started or completed, involving 1.283 billion yuan of investment. Four cities and counties, such as Xinmi, overstated the completion of investment of 15 projects, amounting to 432 million yuan.

The audit also found that 24 projects in nine cities and counties, including Xin Yang, were delivered for use without acceptance inspections, involving an investment of 563 million yuan. 73 counties, including Zheng Yang, had substandard projects after the completion of projects, involving an investment of 3.346 billion yuan. Three non-disaster-affected projects in three counties, including Xun County, illegally obtained reconstruction funds of 375 million yuan.

The central government has been focusing on the work of clearing accounts owed to private enterprises and small and medium-sized enterprises since the end of 2018. The two meetings of the Political Bureau of the Central Committee in April and July 2023 have proposed to solve the problem of the government’s delinquency in accounts owed to enterprises. The audit found that some local governments (including their departments and institutions) and state-owned enterprises have newly defaulted on accounts owed to small and medium-sized enterprises in the private sector by 9.563 billion yuan, including 8.002 billion yuan owed by 86 municipal and county governments such as Zhu Madian, accounting for 83.68%, and 1.494 billion yuan owed by 14 state-owned enterprises, accounting for 15.62%. In addition, 10 cities, including Xin Yang, have falsely resolved and settled 144 million yuan of SME arrears.

In addition, the audit disclosed that 67 projects such as the Jiaozuo section along the Taihang Expressway did not start construction according to the provincial plan, involving a planned investment of 234.487 billion yuan. Zhengzhou and five other cities falsely reported that they had started new construction of low-rent housing of 10,400 units.

Note: one U.S. dollar equals 7.4 Chinese yuan. 

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