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Auditors to investigate use of lottery funds
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Category：Current Affairs
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Subject：People and society ; System reform ; Finance
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Source：Shanghai Daily
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Publish Date：11-28-2014
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China's audit authorities are checking the management and use of lottery funds across the country amid growing skepticism about China's lottery operations.
The National Audit Office has sent teams to 18 provinces to audit their lottery funds in an exercise that will take around four weeks, yesterday's Economic Information Daily reported. The provinces were not named.
One official told the newspaper that such a large scale audit of lottery funds was rare.
China's two state-run lotteries — a welfare lottery and its sports equivalent — have been running since the 1980s.
The results of the audit will probably be announced next year, and suggestions made if problems are found, officials said.
No provincial auditing staff will take part in the audit, the newspaper reported.
China's lottery sales in October hit 32.7 billion yuan (US$5.3 billion), up 20.3 percent year on year, the Ministry of Finance announced yesterday. Welfare lottery sales reached 17.75 billion yuan, up 14.5 percent year on year. Sports lottery sales rose 27.9 percent year on year to 14.95 billion yuan.
In the first 10 months of this year, total lottery sales stood at 312.11 billion yuan, up 24 percent from the same period in 2013.
Last year, total lottery sales topped 309 billion yuan, up 18.3 percent year on year, according to the ministry. Proceeds from lottery ticket sales cover administrative fees and public welfare projects as well as jackpots.
A total of 50 percent covers the jackpots, while 35 percent should be used for public welfare projects.
Since the lotteries were launched, sales have totalled more than 1.7 trillion yuan.
“Lottery money is an important source of income for many provincial governments, and various risks and potential hazards in the management and use of lottery funds always exist, thus a large scale auditing is needed,” said Wang Yongjun, director of a Central University of Finance and Economics research unit.
Wang said improper use of lottery funds and low efficiency in their use were the major problems.
In a report released in July, Shandong Province auditors revealed that from 2011 to 2013, 10 city-level welfare lottery centers did not hand over administrative fees totaling 214 million yuan, and Linyi City and four counties did not hand over 45.27 million yuan which should have been used for public welfare projects.
Seven cities in the province were found to have misused lottery administrative fees totaling 27.24 million yuan and eight cities and 44 counties were found to have misused funds for public welfare projects.
Jinan City, for example, was found to have used funds to pay retirees' pensions and the salaries of staff at its Civil Affairs Bureau.
Public skepticism on the use of lottery funds and the fairness of draw has been on the increase because information provided by authorities is far from transparent, the Today Morning Express newspaper reported.
Scandals related to lottery centers include revelations this year that a luxury training center owned by the China Welfare Lottery Distribution and Management Center had been turned into a hotel for public servants rather than hosting training sessions.
And in 2012, it was revealed that the Henan Province Welfare Lottery Center was occupying a huge 14-floor building, though it had fewer than 100 employees, and was renting out space to a restaurant.
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