Funding misuse shakes Chinese science base

Hepeng Jia/Beijing, China

Huge abuse of science funding has been identified in China despite the country’s continued efforts to regulate use of science budget funds.

On 1 September, the Central Audit Office released a shocking report, exposing 54 ministries or central government-affiliated institutions as having misused their funding. Among them were major science organisations, such as the Ministry of Science and Technology (MOST), the Chinese Academy of Sciences (CAS), and the Chinese Academy of Agricultural Sciences. 

According to the report, in 2008, MOST did not include a 681 million yuan (US$10 million) surplus from the previous year in its annual budget, while in 2003 the Institute of Software, CAS, used 1.5 million yuan (US$238,854) to speculate on the stock market and has not returned the money. 

MOST was also granted 1 million yuan from the State treasury in 2005 to host a science communication meeting and another 1 million yuan to join an international nuclear organisation in 2007, but the meeting has never been held and the membership fee has not been paid, yet the money has not been returned. 

A group of MOST-affiliated organisations, such as the Institute of Science and Technology Information of China and the High Technology Research and Development Centre, were also named as having misused funds.

A flag bearer for chemistry research in China, the Institute of Chemistry, CAS, was found to have privately extracted a 5 per cent slice from all of its research funding under the guise of an ’equipment maintenance fee’ between 2007 and 2008. The money, which the audit office says has been taken in violation of financial rules, totalled 10.6 million yuan by the end of 2008.

Separately, the Chinese Academy of Agricultural Sciences was found to have used land intended for field trials to build commercial offices. Property sales and rent from the site have brought a total of 900 million yuan in revenue to the academy. 

MOST and the related CAS institutes have promised to use the additional funds for next year’s research budget and to pay back any misused funding; other institutions are sourcing money to return the misappropriated funds.

But Zheng Fengtian, a professor of economics at Beijing-based Renmin University of China, says that the crucial reason for funding misuse is an inappropriate budget system that is not transparent. ’It is too easy to make a funding decision for unreasonable projects without careful investigation and thorough debate,’ says Zheng, adding this has led to inappropriate use of money.

Another widespread problem is the late distribution of agreed research funds from the headquarters of MOST, CAS and other institutions to individual research projects. Zheng says that this is because the funding agencies want to retain the money in their bank accounts longer to earn more interest.

Cao Cong, a senior research associate with the Levin Institute of the State University of New York, says many funding regulations are too rigorous to accommodate the flexibility of research activities. 
’In fact, more auditing work should be implemented for individual research projects to identify possible funding misuses and perhaps corruption. These are more meaningful,’ Cao told Chemistry World.