Chinese official: No misuse of stimulus funds

Special Report:Global Financial Crisis

BEIJING, Feb. 19 (Xinhua) -- An official of China's
National Audit Office (CNAO) said Thursday that the agency had not found any
serious misuse of economic stimulus funds, but he vowed to step up supervision
to ensure economic and social stability.

"I am gratified to tell you that the government
policies have been implemented well across the local departments, and swift
measures have been taken to ensure economic growth," Liu Jiayi, the head of
CNAO, told reporters.

The audits focused on whether funds were used in line
with industrial restructuring policies, and whether the money went to
high-pollution or energy-intensive projects.

Expensive projects and those concerning environmental
protection, as well as money spent to tackle public emergencies, would be
closely watched, he said.

Expenditures to improve living standards, including
farm subsidies and investments in drinking water projects, would be fully
audited, he said.

China unveiled the 4 trillion yuan (580 billion U.S.
dollars) stimulus package in November to revive the economy. Growth slowed to
6.8 percent in the fourth quarter.

Auditors will reveal extravagance, large losses and
waste in stimulus spending, as well as other serious violations and crimes, Liu
said.

Although no major problems were found during the
audits, "there was still room to improve," he said.

He noted that money hadn't become available quickly
enough in some underdeveloped areas with limited fiscal revenue, and overlapping
construction persisted in some areas due to poor planning.

About 6 billion yuan was misused in 2008. Most of the
money has been confiscated, according to Liu.

"We will hit hard against violations. No mercy will
be shown when dealing with illegal activities," Liu said.

Liu said the CNAO would start a full-scale audit this
year of how funds were used for the Beijing Olympic projects. The income and
expenses of the Beijing Organizing Committee for the Games of the XXIX Olympiad
(BOCOG) would also be audited.

Last year, selective audits were conducted on several
Olympic projects and irregularities were found "in one or two"-- meaning very
few, Zhang said, without giving details. He added that the BOCOG had made
immediate corrections.

The CNAO was now focused on checking the quality,
fund management and land use of reconstruction projects in quake-stricken
Sichuan Province, said Zhang.