Chinese Audit Finds Quake Funds Misused


SHANGHAI—Chinese government accountants said officials in areas hit by a massive earthquake in 2008 diverted $34 million in reconstruction money to unauthorized uses—a relatively small amount compared to size of the rebuilding effort.

Associated Press

Residents evacuated the area near the epicenter of the earthquake in southwestern China's Sichuan province, in May, 2008.

In a report released Thursday, the National Audit Office said that an October review of reconstruction projects following the 7.9-magnitude earthquake that hit southwestern China in May 2008 also found other problems, ranging from families pushed to return to unsafe homes to major delays in school reconstruction in one province.

Overall, however, the report concluded that the "use and management of reconstruction funds is well regulated," and said the audit agency's investigation "didn't find serious problems involving illegality, rule-breaking or wasteful and loss-making practices."

The scale of China's rebuilding effort in the wake of the quake, which left nearly 90,000 people dead or missing and five million homeless, is massive. The auditors' report covered nearly 850 rebuilding projects for infrastructure, schools and homes with planned investment totaling $11.26 billion, of which $5.46 billion had already been spent.

Overall, China had spent nearly $74 billion on reconstruction projects as of October, roughly half of the planned rebuilding budget for the three quake-hit provinces, according to the National Development and Reform Commission. Nearly 240,000 replacement homes also had been built or were under construction, along with more than 2,900 schools.

Write to Gordon Fairclough at