More than US$4 billion has been illegally spent by government officials in south China's Guangdong Province and another US$7.54 billion lost due to poor management, according to a report released on Saturday by the provincial audit department.

"The illegal behavior included embezzling public money, spending public funds on lavish dinners and gifts, and shifting public funds to personal accounts," said the department's director, Zeng Shouxi.

Over 400 officials were reported to be involved one way or another in the activities, the details of which came to light after a five-year investigation between 2000 and 2004 that was conducted by the audit department and involved the provincial bureaus of supervision and finance and the provincial government.

The accounts of 10,772 officials were audited in that period and 35.3 billion yuan (US$4.35 billion) was found to have been illegally used.

Those investigated also caused financial losses of 61.2 billion yuan (US$7.54 billion) during the five years because of improper management.

After the investigation, 71 government officials were demoted, 36 dismissed, 105 disciplined, and 231 sent to justice departments for further investigation, according to the report, while 747 were promoted.

Zeng said those rewarded were officials who reported corrupt colleagues and worked with investigators, but refused to reveal their names or those punished.

"In collaboration with the provincial government, we will crack down on malpractice by government officials in the future," he said.

According to provincial government and audit department plans, from next year all officials below the rank of county magistrate must be audited when due to leave their posts.

From 2007, the department will audit the accounts of chief government officials at least once during their terms of office.

The leaders of state-owned enterprises (SOEs) and state-holding SOEs must also be audited before a leader leaves, and accounts of key projects related to infrastructure and financial development will be supervised by the government, according to the plans.

(China Daily October 10, 2005)