Authorities will review the use of penalties imposed on families who violate strict family planning rules after a National Audit Office probe found 1.6 billion yuan (HK$2 billion) in fines had been misspent, state media reported.
A government check of 45 counties in eight provinces and Chongqing found that much the money collected from the fines had been spent in violation of the rules.
The National Audit Office said on Wednesday that the fines to compensate for the public services used by the extra child - officially called "social compensation fees" - were retained by the government agency charged with enforcing the one-child policy, in violation of guidelines on collecting the fines, released in 2002.
The probe going back three years comes weeks after more than a dozen lawyers wrote an open letter to the National Audit Office asking whether the accounts have been audited.
Wu Youshui , a lawyer from Zhejiang who applied in July for provincial governments to release information on the fines, said the reports confirmed suspicions about the chaotic state of affairs regarding their collection.
Guidelines say that the fines must be submitted to local government treasuries and be spent on public services. Revenue from the fines does not belong to the central government or local government agencies enforcing the one-child policy.
Yet, in five counties audited in Hunan , investigators found that 23.9 million yuan in collected fines had gone to staff bonuses and receptions. Five police stations in Yunnan county had used 1.2 million yuan for receptions and maintenance of department vehicles.
The reports from all 45 counties showed that the numbers of illegal births were inaccurate, if not manipulated.
Mao Qunan , a spokesman of the National Health and Family Planning Commission, said it would move quickly to improve the collection and management of fines, Xinhua reported. It would tighten oversight and order planning departments to publish fine data.
Wu said only 15 of the country's 31 provinces and municipalities responded with information about the amount of fines they collected: 12.8 billion yuan in total. None explained how the fines were used.
"While only five counties from each of the nine provinces were audited, you could already see how much of the fines was kept from government treasury to be misused by other local government agencies," Wu said.
Poor administration was only partly to blame, Wu said. Upper-level governments often set thresholds for local government agencies to rein in violations of the one-child policy, while also setting targets for fines collected for these agencies.