Auditors uncover fraud at China's free schools

Source: Xinhua  |   2008-7-5  |     NEWSPAPER EDITION

The free-tuition image of China's government-backed compulsory education in rural areas has been tarnished after auditors discovered widespread unauthorized collection and withholding of fees and embezzlement of government funds.

The National Audit Office said yesterday schools in 54 counties illegally collected 51.1 million yuan (US$7.45 million) from students from January 2006 to June 2007.

Some rural schools collected money from students either in the name of donations, after-school training, exam fees or even bicycle consignments, according to a statement published on the NAO's Website.

The NAO found schools also acted against rules as agents of other institutions to collect fees totaling 113.9 million yuan. This included 66.3 million yuan for tutorial books, 33.5 million yuan in insurance fees and 12.1 million yuan for school uniforms or physical check-ups.

Schools collecting such fees for other institutions falsely made it appear compulsory for students. Some schools may have profited from these practices by exaggerating the exact sum of money or receiving rebates, said an NAO official surnamed Wang.

Auditors also found embezzlement of government funds for compulsory education at schools in 46 counties, out of the 54 in total. This involved 115 million yuan and was mainly due to poor management.

The embezzled funds were used to erect school buildings and to pay for teachersand other school employees, daily administration of schools and vehicle purchases.

The messy management also saw about 25 million yuan worth of public-school funds go into 129 personal accounts, the NAO said.

Bao Guoming, head of NAO's civil service department, said the scandal was a result of lax government supervision and poor internal control at schools.

Some poor counties were more likely to misappropriate funds set aside for compulsory education to pay for old debts and build school houses with limited support from local governments, he said.