Local governments are being urged to speed up their allocation of "matching funds" needed to secure foreign aid.

The National Audit Office made the call in its latest audit report on foreign aid projects.

But while 202 million yuan ($29.7 million) of matching funds was not in place for 10 foreign aid projects in 2007, shortfalls were less severe than past years, said a senior audit official.

Matching funds, usually allocated by local governments and the domestic unit responsible for the projects, are used along with foreign funding. Of 104 foreign aided projects in 2007, 10 had problems.

Xu Jiming, director of Foreign Funds Application Audit Department of NAO, said earlier audit efforts found that 1.34 billion yuan of matching funds was not in place for 11 projects in 2006.

The report also found that 58.33 million yuan of funds for four projects were stranded at the hands of local financial department or the project implementation body, and two projects failed to pay capital funds of 2.23 billion yuan in time. In addition, 22 projects had problems of non-standard financial management and accounting practices, down from 42 projects found in 2006.

The NAO has urged local governments to amend the problems as soon as possible. Xu said that by the end of last November, 7.2 million yuan of matching funds and 54.3 million yuan of stranded project funds have been in place, and 900 million yuan of capital funds have been paid.

The 104 foreign aid projects planned to invest a total of 204 billion yuan. By the end of 2007, 132 billion yuan were poured into the projects, including 23 billion yuan of foreign funds.

(China Daily April 25, 2009)