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The National Audit Office (NAO), the country's top audit body, has pledged to strengthen its supervision of social security funds in a bid to curb misappropriation and embezzlement.

In a circular issued yesterday, the NAO said it will conduct a thorough check of the country's funds in a bid to identify areas of lax management and corruption.

Five funds of particular interest to the public will be scrutinized. These are the endowment insurance, unemployment insurance, urban medical insurance, work injury insurance and maternity insurance funds.

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The audit will be carried out at provincial, municipal and county levels and will become an annual event.

The circular said that the main aim of the check was to get a clear view of the scale, distribution and management of the funds.

The NAO said the check will also help it to detect inherent problems in the collection, management and use of the funds.

"Through consecutive audits, (it is expected) to boost the collection of social security funds and ensure their safety," the circular said.

Audits of other funds, such as the housing accumulation fund, rural health insurance, will also be conducted in time, it said.

Li Jinhua, auditor-general of the NAO also promised better auditing at the municipal and county levels in the future.

The first audit will focus on the integrity of fund collection, the regular inflow and outflow from the funds, maintaining their value and growth as well as detecting loopholes in the current collection and distribution systems, Li said.

Illicit activities like misuse, misappropriation, embezzlements, and unlawful transfers will be targeted during the check.

China's social security funds have attracted a lot of attention in recent years due to the exposure of several cases of fund misappropriation, involving corrupt officials.

Last year, Chen Liangyu, Party secretary of Shanghai, was sacked and put under investigation for the country's largest pension scandal.

He was alleged to have misappropriated 3.2 billion yuan ($415.6 million) of the city's pension funds to invest in construction projects for his personal gain.

(China Daily 05/22/2007 page3)