A national audit has uncovered social security fund fraud involving 1.7 billion yuan (HK$2.09 billion) and more than 300 people.
In a report released yesterday, the National Audit Office detailed how various governments misused the social security funds. Spending 595 million yuan on operating fees, 114 million yuan to balance official books and 294 million yuan to build training centres and stadiums. Also, 85.9 million yuan was used to build offices and 29.5 million yuan to buy cars.
Nearly a third of the money was used for unauthorised financial investment, according to the report.
In the first thorough audit of the social security network, more than 40,000 auditors took two months to check 18 funds, including basic medical insurance, pension, unemployment and welfare funds for the disabled and low-income families in 404 cities and 2,790 counties.
By the end of last year, the social security fund had a balance of 3.11 trillion yuan, more than four times the amount in 2005, the report said.
In spite of the misuse, the audit concluded the mainland had made a breakthrough and 'basically' established a social security network. Basic medical insurance, with schemes for rural, urban and unemployed urban residents, covered the entire population of 1.3 billion people, 3.77 times the number insured in 2005.
More than 622 million people had joined the basic pension scheme for rural and urban unemployed residents, 3.86 times the 2005 level.
But the basic social security scheme needed improvement as society evolved, the report said.
By the end of last year, 1.12 million people were insured under basic pension schemes and 10.8 million people had medical insurance from several sources, costing the government an extra 1.7 billion yuan in subsidies. More than 2.4 million people had more than two pension accounts.
The basic social insurance and assistance network is overseen by agencies such as the Ministry of Health, the Ministry of Human Resources and Social Security and the Ministry of Civic Affairs. It follows regulations from a variety of government agencies and effective co-ordination was needed for those people not receiving favourable medical scheme insurance.
Furthermore, 1.85 billion yuan was paid in allowances or reimbursement for medical bills that would not be permitted under stricter scrutiny.
The audit found medical institutions in six provincial-level cities, 75 lower-level cities and 226 counties had swindled 287 million yuan by forging medical charts, invoices or inpatient numbers.
Some government employees had withheld information about deaths and forged personal information to defraud 44 million yuan in pensions or allowances.
'The audit has uncovered 132 violations involving more than 300 people. The leads have been passed to relevant government agencies for further investigation,' the report said.
Some of the problems had been rectified by July 25 and 2.6 billion yuan recovered.