The auditing authority said on Thursday that it had uncovered three cases of the illegal use of quake relief funds involving nearly 300,000 yuan (US$43,500).

The findings were published on the website of the National Audit Office (NAO) -- the first audit results involving the huge amount of relief funds for regions hit by the massive earthquake exactly a month earlier.

The NAO said malpractices were found in a local office of the All-China Federation of Industry and Commerce (ACFIC) in Henan and a branch of Industrial and Commercial Bank of China in Mianyang, one of the worst-hit areas.

The local non-governmental industry and commerce association in Anyang, Henan province, was found to have used 271,100 yuan (US$39,000) from donations to buy relief goods without authorization.

About 41,500 yuan (US$6,000) was spent on apparel purchased from the younger brother of an ACFIC official and fake invoices were presented along with the goods. Auditors discovered cast-offs among a batch of clothes dispatched by the official to Guangyuan, Sichuan.

The NAO said the local government of Anyang had started investigating the matter.

The Fucheng ICBC sub-branch in Mianyang was found to have bought 56 pairs of Nike sneakers, worth 28,500 yuan (US$4,100), for its employees with relief funds. Invoices stated they had bought umbrellas and raincoats.

The branch has returned the misappropriated funds, the NAO said.

The third case noted by the NAO involved people stealing money in the name of quake relief funds by sending text messages to cell phone users asking them to remit donations into specific banking accounts.

The NAO said it had brought in public security departments to investigate and some bank accounts had been frozen by the police.

The national auditor said it would publish auditing results every month for public scrutiny.

The government had earmarked 23.61 billion yuan (US$3.4 billion) in relief funds by noon yesterday, while domestic and foreign donations totaled 44.85 billion yuan (US$6.5 billion) in cash and goods.

The government has shown resolve to fight corruption during the reconstruction of the quake-hit area by promulgating a regulation on Sunday, the first of its kind.

"Effective supervision of the use of reconstruction funds is not only a social focus, but also an issue we have attached importance to when drafting the regulation," Cao Kangtai, director of the State Council's Legislative Affairs Office, said yesterday.

He told a press conference that the regulation aims to make fund utilization open to the public.

The standard procedure set in the regulation asks local governments, NGOs and public utilities to make public information about donated funds and materials, which includes the source, amount, distribution and utilization, he said.

People are welcome to report any illegal action, he said.

(China Daily, Xinhua News Agency June 13, 2008)