Chinese Official: No Misuse of Stimulus Funds

    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.