In order to strengthen the management of land resource, promote land use in a saving and intensive way, maintain security of state-owned land assets and realize dynamic balance of the total amount of cultivable land, in 2009 the National Audit Office (known as CNAO) conducted audit investigations on collection and management of special land funds and their application during 2007 and 2008 (hereinafter referred to as the two years in 11 provinces and autonomous regions Hebei, Liaoning, Jilin, Jiangsu, Zhejiang, Fujian, Jiangxi, Henan, Hainan, Ningxia and Xinjiang. The random check focused on revenue management from land transfer in 13 municipalities and cities and management of funds related to land development and rearrangement in 27 municipalities, cities, prefectures and 56 counties and districts under the jurisdiction of municipalities and cities (See the attachment for the exact list of fund categories and areas involved.) The extended audit investigations covered part of the units that use the land and projects of land development and rearrangement. Now the audit findings are hereby announced as follows:
1. Basic Situation of Management of Land Requisition and Transfer The revenues from land transfer for the audited 13 municipalities and cities during the two years amounted to 335.325 billion RMB and the expenditure amounted to 315.112 billion RMB. Up to the end of 2008 the accumulated balance stood at 49.692 billion RMB (including the balance resulting from the previous years; same below); during the two years 11 provinces and regions altogether collected and withdrew funds of 65.516 billion RMB related to land development and rearrangement and spent 42.643 billion RMB. Up to the end of 2008 the accumulated balance stood at 42.904 billion RMB.
1. Basic Situation of Management of Land Requisition and Transfer The revenues from land transfer for the audited 13 municipalities and cities during the two years amounted to 335.325 billion RMB and the expenditure amounted to 315.112 billion RMB. Up to the end of 2008 the accumulated balance stood at 49.692 billion RMB (including the balance resulting from the previous years; same below); during the two years 11 provinces and regions altogether collected and withdrew funds of 65.516 billion RMB related to land development and rearrangement and spent 42.643 billion RMB. Up to the end of 2008 the accumulated balance stood at 42.904 billion RMB.
The audit findings showed that local governments of various levels in the provinces and regions set great store by management of land requisition and transfer and land development and rearrangement. They actively adopted measures to strengthen management of projects of land resources, revenues and expenditures of land transfer and land development and rearrangement, explore a mechanism for using land in a saving and intensive way and improve the resettlement and security system for farmers whose land was requisitioned. As a result, management of collection and use of land transfer fees and land development and rearrangement scored quite remarkable success.
(1) The regulatory system for land management was gradually improving. Centering around implementation of the strictest land management system, the Ministry of Land and Resources and governments of 11 provinces and regions took several measures to strengthen land management and land development and rearrangement, thus making considerable progress in land planning, land transfer, law enforcement and supervision, examination and approval of land requisition, land use in a saving and intensive way and regulatory management system for land development and rearrangement. For instance, Hangzhou municipality was exercising a strict examination and approval regulatory system for planned target adjustment of transferred land plots, collecting a fee which was thrice the different amount after the adjustment from the land-transfer revenue, thus effectively restraining the practice of adjustment in planned targets. Resorting to strict pre-examination of land use, provinces like Hebei, Jilin, Jiangsu, Fujian, Henan and other places activated reserved usable land, sorted out idle usable land and brought forward control indexes for construction land for industrial projects. Hence, land was used economically. Jilin Province made publicized the Management Regulations for Measurement of Important Projects of Land Development and Rearrangement and Fund Appropriation in Western Part of Jilin (Interim), which promoted the standardization of implementation of projects of land development and rearrangement.
(2) Enforcement of land laws and efforts of checking were being strengthened gradually. In the past two years the Ministry of Land and Resources actively organized the campaign of 100-day Action to implement land laws, enforcement of checking with satellite remote sensing, etc. It severely dealt with law-breaking and regulation-violating cases. All this, in a certain degree, curbed the occurrences of illegal use of land. The degree of systematization of land management was on the rise and land was becoming increasingly a part of market-oriented economy. In the two years the 13 municipalities and cities altogether appropriated 0.2454 million mu* of usable land and transferred 0.4955 million mu of usable land, of which the area that was transferred through bidding and auction accounted for 53.44% of the total area of usable land.
(3) Obvious was the result of land development and rearrangement. During the two years 11 provinces and regions acquired 3.9251 million mu of new cultivated land, which was 122.91% of the state plan. Land development and rearrangement also had good economic and social benefits. According to the random check, the completed and accepted 15 projects in 4 years in Xiapu County, Fujian Province, rearranged 36,000 mu of arable land in total and acquired 4,900 mu of new cultivated land with an increase of annual net returns of over 18 million RMB. Henan Province improved conditions of production in agriculture and raised the comprehensive productive capability of grain by carrying out reform in irrigation and water conservancy, roads and forests. After rearrangement was completed, the grain output in project areas increased, on average, by 20%.
2. The Main Problems Found in the Audit Investigation and Preliminary RectificationsThe audit investigation found that management of special funds earmarked for land was not up to standard in part of the cities and counties. There were still cases of regulation-violating land requisition, replacement of requisition with renting, agreement-breaking transfer of land for industry and business purposes and of dissatisfactory result of land development and rearrangement.
2. The Main Problems Found in the Audit Investigation and Preliminary RectificationsThe audit investigation found that management of special funds earmarked for land was not up to standard in part of the cities and counties. There were still cases of regulation-violating land requisition, replacement of requisition with renting, agreement-breaking transfer of land for industry and business purposes and of dissatisfactory result of land development and rearrangement.
(1) Management of revenues from land transfer
a. In some places no collection of land transfer revenues that should have been collected.
Firstly, under the cover of attracting investment from overseas , trasformation of old urban areas and changing the system of state-owned enterprises , 11 municipalities and cities deducted and exempted, in violation of regulations, 1.961 billion RMB of land transfer revenue; 3 cities transferred 8,000 mu of land in 177 cases for a price 70% lower than the criterion price; planning departments of 3 cities approved the volume rate of 1,800 mu of land. Thus, 1.057 billion RMB of land transfer revenue that should have been collected was lost.
Secondly, 12 municipalities and cities failed to collect 32.326 billion RMB of land transfer fees that should have been collected. Departments of land and resources of 7 of them still issued use permits of state-owned land in violation of regulations when 25 land-use entities failed to pay land transfer fees, which amounted to 2.592 billion RMB.
After the audit pointed out the fore-mentioned problems, governments concerned collected 16.178 billion RMB of land transfer fees.
b. Management of land transfer revenue of 67.481 billion RMB in 11 municipalities and cities was not normalized and the revenue was not administered under budgetary management of funds in compliance with the regulations, the amount of which accounting for 20.1% of the total collected sums. Of the 67.
481 billion RMB 51.587 billion RMB went to financial stopgap accounts and 5.573 billion RMB was collected by non-financial departments of the management committees of development zones; 10.321 billion RMB was paid by land-use entities as direct payment for compensation of resettlement and for settlement after relevant systems for enterprises were reformed.
After the audit pointed out the fore-mentioned problems, the 11 municipalities and cities carried out rectifications in compliance with the regulations.
c. 11 municipalities and cities changed the application purposes of land transfer revenue involving 5.691 billion RMB. 6 of them spent 3.936 billion RMB on construction of public projects, such as new districts for institutes of higher learning, conference and exhibition centers, theatres, software parks; 4 of them spent 0.
968 billion RMB increasing registered capital of government-invested enterprises; 6 of them spent 0.326 billion RMB subsidizing public transport companies in purchasing buses and paying their debts and setting up special funds for development of science and technology for agriculture; 7 of them spent 0.
21 billion RMB making up the shortage of administrative funds of the department of land and resources and that of urban construction; 4 of them spent 0.238 billion RMB in violation of regulations constructing and purchasing office buildings, business buildings and houses for government staff and workers.
After the audit pointed out the fore-mentioned problems, local governments concerned retrieved and returned 1.262 billion RMB in compliance with the regulations.
d. Some municipalities and cities approved and used land in violation of the regulations. 7 of them, without examination and approval, requisitioned, in fact, occupied 39,000 mu of collective-owned land; land-use entities of 4 of them occupied 10,010 mu of collective-owned land by way of replacement of requisition with renting for non-agricultural project of construction of hotels and tourist facilities; 5 of them, without examination and approval, established new development zones and expanded development zones of various kinds with 2,700 mu of essential farmland involved; land-use entities of 7 of them used 31.800 mu of land before approval was obtained (7,200 mu of cultivable land, 2,700 mu of farmland), of which 23,200 mu of land was for projects of infrastructure facilities and 8,600 mu of land for industrial projects; 6 of them, with their own policies or in the name of settling problems left over by history, transferred 16,300 mu of land for industry in 220 dealings by way of agreements, the land that should have been transferred through bidding and auction; 8 land-use entities of 3 of them presumptuously changed the use purposes of 2,800 mu of land.
After the audit pointed out the fore-mentioned problems, local governments concerned retrieved 31,500 mu of land, confiscated and dismantled illegal structures and buildings on 0.3365 million m2, fines of 12.1376 million RMB was imposed and make-up procedures for examination and approval for 11,600 mu of land were undergone according to the regulations.
e. Some places failed to update standard land price according to relevant regulations. The provision set by the State is: in principle every three years the standard land price shall be upgraded and it shall be adjusting with the market change. By the end of June 2009 the land price in 5 municipalities and cities had remained unchanged for three years. The market price of land in 3 of them in fact was over 100% higher than their actual applicable standard land price.
After the audit pointed out the fore-mentioned problem two of them began to upgrade their standard land price.
(2) Land development and rearrangement
a. Cities and counties under the jurisdiction of 9 provinces and regions failed to collect what they should have collected in full amount, which amounted to 2.837 billion RMB, of which 0.582 billion RMB of land use fees for land for newly added construction was not collected in full amount, which accounted for 32.33% of the collectable amount; 0.319 billion RMB for reclamation of arable land was not collected in full amount, which accounted for 19.91% of the collectable amount; 1.934 billion RMB for development of agricultural land was not collected in full amount, which accounted for 51.47% of the collectable amount.
After the audit pointed out the fore-mentioned problems, local governments concerned collected 1.295 billion RMB related to land development and rearrangement according to relevant regulations.
b. 3 provincial departments, 2 municipal departments and one county department of land and resources and finance failed to submit 0.918 billion RMB related to land development and rearrangement to the national treasury according to relevant provisions.
After the audit pointed out the fore-mentioned problem, relevant local departments of land and resources and finance began to carry out rectifications according to the regulations.
c. 3 provincial departments, 9 municipal departments and 11 county departments of land and resources and finance changed the use purposes of funds of 2.094 billion RMB related to land development and rearrangement, of which 0.946 billion RMB was used for construction of urban infrastructure facilities; 0.401 billion RMB went to capital construction and funds of government departments; 0.121 billion RMB was lent to other departments and for investment; 41.48 million RMB was used to make up the shortfalls in local financial budgets; 0.584 billion RMB was for compensation for resettlement and land reservation.
After the audit pointed out the fore-mentioned problem, local government concerned retrieved 0.293 billion RMB according to relevant provisions.
d. The random check of 90 projects found that some local projects of land development and rearrangement were not strictly in oversight and mangement.
Firstly, because of unreasonable and incomplete design and planning 11 projects were forced to terminate or suspend. Some completed projects failed to realize their expected goals because of unreasonable design.
Secondly, 14 projects with investments of 0.111 billion RMB were found to have had regulation-violating bidding, sub-contracting or no bidding at all.
Thirdly, there was repeated submission to higher-up authority of 6 projects and other ones related to land development and rearrangement and ones related to comprehensive development of agriculture; the amount of funds involved amounted to 90.189 million RMB.
Fourthly, 10 projects of land development and rearrangement made a false report on their project costs. The untrue expenditure amounted to 10.2372 million RMB.
Fifthly, construction quality of 20 projects of land development and rearrangement was not satisfactory and the follow-up management and maintenance were not in place owing to insufficient supervision and checking of their competent authorities. Consequently, certain loss and waste were caused.
After the audit pointed out the fore-mentioned problems, a comprehensive sorting out and check was conducted by Liaoning Province and other places on qualifications of the design units participating in the projects related to land development and rearrangement. Xinjiang Autonomous Region and other places worked out plans for re-selecting venues for three unqualified projects. Local governments concerned retrieved 3.5625 million RMB, which was part of the falsified expenditure.
5. In a few places the area of new cultivated land was untrue or more cultivable land was occupied but less was supplemented.
Firstly, 119 projects of land development and rearrangement made a false report on 13,500 mu of newly added cultivated land by falsifying acceptance reports, tampering with categories of land and data.
Secondly, before reaching their goals 13 projects of land development and rearrangement reported to their competent authorities that there was 29,300 mu of new cultivable land.
Thirdly, 9 construction projects took more than it was due. The 4,294.45 mu of cultivable land which had been occupied but less supplemented.
After the audit pointed the fore-mentioned problems, local governments concerned began to reduce the use of cultivable land and supplemented 3,152 mu of land to the existing amount of cultivable land.
Local governments concerned and relevant departments attached great importance to the problems found in the audit investigation. Apart from making the above-mentioned rectifications, before the audit was over and after it they strengthened their efforts in taking effective measures to do a better job in rectification.
Firstly, the Ministry of Finance, the Ministry of Land and resources and other departments jointly issued the Circular of Further Strengthening Management of Revenue and Expenditure of Land Transfer, requiring governments at various levels to further standardize management of revenue and expenditure of land transfer and carry out actively rectifications for the problems found in the audits.
Secondly, 18 rules for standardizing land transfer, registration, planning and accountability formulated by local governments were made public successively, thus improving the current 30 provisions for strengthening project and for management of special funds earmarked for land development and rearrangement.
Thirdly, 32 people responsible for violation of regulations and disciplines were dealt with properly and correspondingly according to laws.
Fourthly, efforts are being made for normalized management of special funds. They are now administered under budgetary management; efforts are being exerted to retrieve the funds that have been used in violation of regulations.
The National Audit Office will announce the final results of rectification at a proper time in the future.
Attachment
The list of Fund Categories and Places Involved in the Audit Investigation of Land Requisition, Land Transfer and Management of Special Funds in 11 Provinces and Regions
1. Special fund for land
Attachment
The list of Fund Categories and Places Involved in the Audit Investigation of Land Requisition, Land Transfer and Management of Special Funds in 11 Provinces and Regions
1. Special fund for land
Including use fees for land for newly added construction, fees for reclamation of cultivable land, funds for development of agricultural land and fees for re-reclamation of land (The above 4 items are called funds related to land development and rearrangement) and transfer of land-use right of state-owned land.
2. Counties and districts under random check on revenue of transfer of land-use right of state-owned land
Shijiazhuang municipality : city of Luquan
Nanjing municipality: Gaochun County, Lishui County, Jiangning District
Fuzhou municipality: Minhou County
Nanchang municipality: Nanchang County. Xinjian County, Jinxian County, Anyi County
Zhengzhou municipality: city of Rongyang , city of Gongyi, Zhongmou County
Urumqi municipality: Urumqi County, Midong District, Urumqo High and New Technology Development Zone, Urumqi Economy and Technology Development Zone
3. Prefectures, counties and districts under jurisdiction of municipalities submitted to random audit of funds related to land development and rearrangement
Hebei Province: City of Shijiazhuang, city of Tangshan City, Gaoyi County
Liaoning Province: Shenyang municipality, city of Tieling , city of Fushuan , Kangping County, Tieling County
Jilin Province: City of Songyuan City, Qianan County, Qian Gorlos Mongolian Autonomous County, Fuyu County, Changling County
Jiangsu Province: City of Nantong, city of Yancheng, city of Qidong, city of Rugao, Rudong County, Haian County, city of Dongtai, Tinghu District of city of Yancheng
Zhejiang Province: City of Quzhou, city of Lishui, city of Jiangshan, Kecheng District of city of Quzhou, city of Longquan
Fujian Province: Fuzhou municipality, city of Quanzhou, city of Longyan, city of Sanming, Mawei District of Fuzhou municipality, city of Fuqing, Huian County, Xiapu County, Changding City, Zhangping City, Jianning County, Taining County
Jiangxi Province: Nanchang municipality, Yugan County, Taihe County
Henan Province: City of Xuchang, city of Nanyang, city of Luoyang, city of Xinyang, Xiangcheng County, city of Dengzhou, Fangcheng County, Sheqi County, Ruyang County, Yiyang County, Dancheng County. Pingqiao District of city of Xinyang, city of Rongyang
Hainan Province: City of Haikou, city of Dongfang, Lingshui County, Baoting County
Ningxia Hui Autonomous Region: City of Yinchuan, city of Wuzhong, city of Zhongwei, Jinfeng District of city of Yinchuan, Xingqing District of city of Yinchuan, Xixia District of city of Yinchuan, Helan County, Yongning County, city of Qingtongxia, Zhongning County
Xinjiang Uygur Autonomous Regios: Urumqi municipality, Changji Hui Autonomous Prefecture, Turpan area, Bayinguolengmeng Mongolian Autonomous Region, Daban District of Urumqi municipality, Urumqi County, city of Fukang, Hulunbi County, Mylei County,
* 1 mu = o.1644 acre = 0.667 hectare
