Water funds mismanaged

China: Funds intended for the construction of water resources projects in China have been mismanaged, according to report by China's National Audit Office (CNAO).

CNAO audited CNY 71.6 billion (US$ 8.9 billion) of funds for water conservation projects from 2002 and 2003, which accounted for 77% of the total funds available during the period. It found that more than CNY 3.5 billion (US$ 438 million) “retained for no sound reason” and nearly CNY 1.4 billion (US$ 175 million) was used “improperly”.

The report said nearly CNY 1 billion (US$ 125 million) was used for purposes other than water conservation projects, including building hotels and issuing more subsidies and bonuses to staff.

According to media reports, 76 officials have been arrested as a result of the investigation.