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China audit uncovers misuse of affordable housing funds

[BEIJING] China's state auditor said on Monday it has uncovered widespread irregularities in the country's affordable housing programme in 2014, including the misuse of 9.4 billion yuan (S$2.07 billion) of funds.

The problems were uncovered after auditing 182 projects, local government financing vehicles, housing and finance departments, the National Audit Office said in a report on its website.

The funds were misappropriated to pay salaries, office expenses, bank loans and invest in wealth management products, it said.

Some firms illegally obtained 485 million yuan of government subsidies and bank loans for the affordable housing scheme by fabricating documents, the auditor said. The funds were used to build dormitories and offices.

The auditor also found that 20,600 home owners did not qualify for affordable housing as they used fake documents in their applications.

China's central and local governments allocated 560.2 billion yuan for the affordable housing programme in 2014, including 198.4 billion yuan from the central government, the report said.

Nearly 1.1 trillion yuan in investment was made via bank loans, bond issuance and other funding channels, it said.

First approved in 1999, the program aims to provide cheaper housing to low-income families and to improve living standards.

The government has been expanding the affordable housing programme to help address widening income disparity and also provide support for the slowing economy.

Chinese policymakers have told banks to step up lending to support government projects under construction, especially urban subways and affordable housing.

The government said in June that it would extend 149.4 billion yuan in subsidies for renovating dilapidated urban houses this year, under a three-year plan to renovate 18 million dilapidated urban houses and 10.6 million rural houses.