Auditor-General Li
Jinhua reported to the Standing Committee of the 10th National
People's Congress (NPC), on June 23 that 1.4 billion yuan (US$170
million) of the 2003 budget had been misused or wrongfully
appropriated by 41 of 55 government offices under
investigation.
The report sent shockwaves throughout the nation. Li, described
"the man with the iron fist" by the Chinese media, recently agreed
to an interview with Xinhua News Agency.
In a meeting room at the fifth floor of the National Audit Office, the
mild-mannered, soft-spoken Jiangsu native is a far cry from the
stereotyped defender of truth and justice. But he speaks frankly
and with quiet determination.
In June 1999, Li Jinhua was applauded when he finished reading
the audit report to the Standing Committee of the 9th National
People's Congress. The following years have seen increasing
transparency in the reports. "The audit is the watchdog of state
funds," says Li.
Xinhua: Did you expect that this year's audit
report would receive greater public attention than last year's?
Li Jinhua: It is about as I expected. This is
good. I think the people are concerned about the report I made to
the NPC Standing Committee. I should make it clear that the State
Council entrusted me with publishing the report. Although I
provided the materials, that was not my personal decision. It is
the government -- or the premier -- that is determined to expose
these problems in order to rectify and solve them.
Xinhua: What significance do you think the
disclosure of the audit results have?
LJH: The problems involving government
departments must be reported to the NPC Standing Committee and to
the public. I think this is very important. Openness and
transparency have proved worldwide to be the best way to crack down
on corruption and bureaucratism.
Xinhua: You delivered the report on June 23. A
week later, the Law on Administrative Licensing went into effect.
In what respects do you think auditing is associated with
administration by law?
LJH: Auditing was regarded as a kind of
supervision many years ago. My definition of audit is that it's not
just a means of supervision. It's also a means to promote democracy
and rule of law. One of the priorities on our agenda in recent
years has been to promote openness in government administration,
particularly the departments in charge of money. It is very
significant for the central government to execute its
responsibilities according to law and to establish the rule of law.
This is the key to rooting out corruption and resolving issues that
cause dissatisfaction among the citizens.
Xinhua: What do you think of your role in the
transparency of audit reports?
LJH: I really don't think I deserve the
tributes given by some of the media, but I'd like to take this
opportunity to thank them. The audit no doubt comes first to the
public mind when the government administration is improving
transparency. When audit reports are made public, problems will be
exposed, and the citizens feel that the audit office is speaking
for them. So it's not an issue of my personal role. It's the law
that empowers me to do it.
Xinhua: How do the central authorities support
the audit?
LJH: The strongest support is non-intervention.
During my 20 years in auditing and some seven years as
auditor-general, no state leader has ever ordered me not to do
something. All the audit results were reported to the State
Council. Our work is specified in the Audit Law and I can exercise
my power to the fullest, deciding what and how to audit and how to
write and publish the reports.
Xinhua: After the publication of the audit
report, the Standing Committee of the National People's Congress
and the State Council ordered that the problems that were
identified be dealt with severely. What is happening with the major
cases exposed in last year's report?
LJH: All the cases were transferred to the
appropriate departments. This means our work is finished. As far as
I know, all the responsible people in those cases were punished,
but only 70 percent of the embezzled funds were returned.
Xinhua: Some audited units and organizations
deny the results of this year's audit report. Are you under any
pressure?
LJH: No. It is common for auditor and audited
to have different opinions. We are equal. If the audited
organizations are unconvinced, we can re-audit. If we make
mistakes, we will apologize to the public.
Xinhua: Well, not all the audited departments
can take things so philosophically.
LJH: I believe that sometimes it is just a
matter of saving face. Some people always think first of covering
up problems, as they are afraid it will make them lose face. In
fact, they know they have made mistakes. Some banks that want to be
listed on the stock market have asked me not to publish their
problems. I told them my opinion: making these issues public sooner
is better than later, because they will eventually have to face the
problems. Finally, they agreed with me.
Xinhua: Some departments have repeatedly
misused funds despite the audits. When will this end?
LJH: It's understandable that people hope to
settle problems immediately. But many of China's problems cannot be
resolved in a single stroke. It involves the system and tradition,
and interest is an issue as well. Under the planned economy,
everything -- sales, profits, et cetera -- of a department or a
company belonged to the state. There was no need to bother about
making fake accounts. Now, in addition to national interests, there
are regional, departmental, and individual interests. And the legal
system is not perfect. So in my opinion, the phenomenon will exist
for quite a long time. What we can do is to make every effort to
shorten that time.
Xinhua: What is your attitude toward violators
who refuse to mend their ways after an audit?
LJH: Put them under audit monitoring.
Xinhua: Some people say you have an iron fist.
Do you agree?
LJH: That is my self-assessment. I have to be
iron-fisted if I want to do my job well.
Xinhua: Have any government officials come to
you pleading for mercy?
LJH: Yes, quite a number of them.
?
Xinhua: How do you handle such a situation,
especially when the person has the same official rank as you?
LJH: In most cases, I let the person know my
position. It's impossible for me not to report the case to the
premier, because that is my responsibility. I also tell him that we
will immediately double-check and correct our mistakes if they
think the audit results are incorrect. If the results are correct,
I suggest they rectify the problems right away so that I can report
both the problems and the remedies. I often tell the audited units
that have problems, "You had better let me report two 'whats'
instead of just one: What problems you have and what you are doing
to correct the problems." Human beings tend to be forgiving of
people who are correcting their mistakes. I don't like to put the
problem units in dire straits.
Xinhua: It seems that "Ironfisted Li" can also
make concessions under certain conditions.
LJH: But I never yield on matters of
principle.
Xinhua: Some people say that you will finally
lose all your friends. Yet you persist on your own path. You've
been quoted as saying, "I don't care, and I seek no personal
gain."
LJH: I also said, "The person who holds the
position of auditor-general must cut off his or her own route of
retreat.
Xinhua: When all is said and done, you are a
member of officialdom. Aren't you afraid of offending too many
people?
LJH: If you offend all people, then you offend
none. That is my philosophy.
Xinhua: To your recollection, have there been
any departments that you don't dare audit?
LJH: None. Except those exempted by law, all
the state-funded departments are under our purview.
Xinhua: Your former schoolmates are leaders of
several departments.
LJH: We audit them all the same.
Xinhua: What procedures have you adopted in
auditing?
LJH: I think that auditors should answer four
questions.
First, what is it? We must find the truth.
Second, why did they do it? Some abuse their power for the
interests of small groups, or out of self-importance; some are
forced to do it. So we should treat them differently.
Third, what is the impact? We should see whether it hurts the
citizens, or if it causes great losses to our nation. Although some
behaviors don't accord with regulations, they don't cause great
losses. Some may even benefit reform, opening and economic
development. So we will not regard it as a problem, and consider
that regulations might be outdated.
Fourth, how can the problems be solved? We will get the answer
after the three questions above are answered. I think that by
answering these four questions, unjust and misjudged cases can be
avoided.
Xinhua: Are there any shortcomings in our audit
system?
LJH: We still have some catching up to do in
timing. Currently, everything is examined after it happens.
Sometimes the audit lags. Although some problems are dug out, the
losses have already occurred and can't be recovered. Therefore, we
now have to strengthen supervision during operations, try to find
the problems and urge correction then.
Xinhua: Compared with Western countries, what
are the advantages of China's audit system?
LJH: We have different audit systems. The audit
office in Western countries, which is independent from the
government, is responsible to Congress. After they finish their
audit, they report to Congress. Then Congress will question the
government departments according to the audit report. The process
takes a long time, and sometimes it ends up with nothing
definite.
In China, the audit office is a part of the government. We have
lots of ways to audit. For example, we can cooperate with judicial
departments and government supervision departments. The audit
office also has the right to punish violators; and we can cooperate
with the media for supervision. In Western countries, the audit
depends mainly on media supervision and the auditing office has no
disciplinary authority.
Xinhua: What are the weaknesses in our
system?
LJH: I would say the lack of independence. This
weakness is most conspicuous at the local audit agency, especially
when the issue concerns the local government or the mayor. In most
cases, these are concluded with the problems remaining.
Xinhua: What are some of the Western methods
that we should learn from?
LJH: Their auditing agencies have more
independence than ours. In addition, their financial audit is a
relatively small part of the process, because their standardized
budget system results in fewer cases of embezzlement or unjustified
charges. Instead, more resources are devoted to performance audits
-- auditing public funds' economic, social and environmental
performance. The performance audit is what we need to improve. The
focus of our audit is gradually moving toward that. It is expected
that half of our resources will be devoted to performance audits by
2007.
Xinhua: You have been in auditing for 19 years
already. How many points would you give to your work, on a
100-point scale?
LJH: About 70.
Xinhua: What are the most important items on
your agenda as auditor-general?
LJH: Three items: increase the share of
performance audits; accelerate the process of audit transparency;
and further strengthen internal control and management to improve
the quality of the audit.
Xinhua: According to the five-year plan of the
National Audit Office, all of the audit report except those
concerning state and commercial secrets will be open to public
scrutiny by 2007. How will this plan be put into place?
LJH: We have been accelerating the pace in
materializing this plan. Last year, as a trial, we made public the
audit report on the SARS fund. I believe that this kind of
publication will increase substantially this year.
Xinhua: What ensures that the audit of the
National Audit Office is conducted in accordance with laws and
regulations?
LJH: The Audit Law will be amended before long
and we have offered two suggestions. The National Audit Office
should establish a report investigation commission, so that the
audit reports will be examined by a group of professionals. Also, a
government agency supervising and auditing the National Audit
Office should be created. The establishment of these two agencies
will help to make audit reports more objective and fair.
(Xinhua News Agency, translated by China.org.cn, July 15,
2004)