China lottery misapropriation reported

At least some of the RMB 64 billion in funds that China’s Academy of Social Sciences claimed earlier this week was unaccounted for (see previous report) has been found; according to a Reuters report released Thursday RMB 16.9 billion (about US$2.72 billion) was misused or misappropriated.

The government’s National Audit Office claims that it has uncovered widespread misappropriation of the funds from its state lottery programme, illustrating the extent of official corruption as the government ramps up its efforts to combat official graft.

Auditors found that funds were misappropriated through ruses such as the buying and building of office buildings and hotels, or were just plain embezzled, according to a report on the NAO website.

The report claims that irregularities accounted for a quarter of the total of lottery funds received in its 2012-2014 investigation that spanned 18 Chinese provinces.

It is alleged that 17 provinces had flouted the law in engaging in lottery sales through the Internet without approval from the Ministry of Finance….a practice the central government cracked down on earlier this year by requiring provinces to suspend internet sales until a proper audit and review has been completed .

The review order comes as President Xi Jinping’s government fights corruption, and has warned that the problem is so critical that it could affect the ruling Communist Party’s future.

Reuters reports that in one case, 32 lottery shops had used 3.1 billion yuan to construct office buildings, training centres and hotels.

China’s lottery market has boomed in recent years, with experts predicting that it will overtake the United States as the world’s biggest lottery market in 2015.

Lottery proceeds after prizes are supposed to be used for social, sports and community development.