County officials across China misappropriated at least 2.2 billion yuan (US$302.7 million) in meal subsidies meant for rural students between 2021 and 2023, a State Council audit report found.
The money was mostly used to pay off local government debts, the report from China’s cabinet said. The document was made public last week during a meeting of the National People’s Congress Standing Committee, the country’s top legislative body.
The report tracked a total of 23.1 billion yuan in subsidy funds relating to 159 counties across 13 provinces.
More than 100 counties were involved in the wrongdoing, the report found.
In 66 counties, nearly 2 billion yuan in all were directly misappropriated to settle government debts and basic social insurance.
In 41 others, a total of 270 million yuan was siphoned off by lowering meal standards or fabricating purchases across 1,533 schools, the report said. Other counties colluded with suppliers, some of whom provided substandard material, for kickbacks or “donations”.
China introduced the meal plans in 2011 to improve nutrition standards for rural students, many of whom are “left-behind” children of migrant workers in urban areas.
Research shows that providing school meals in impoverished areas can play a key role in reducing malnutrition among children, as well as improving cognitive abilities, academic performance and student enrolment rates. Several other developing economies have also adopted similar plans.
02:13
‘I miss you, dad’: boy talks to surveillance camera while father is away for work
‘I miss you, dad’: boy talks to surveillance camera while father is away for work
Starting in 2011, the central government budgeted 16 billion yuan annually towards a 3 yuan daily subsidy per rural student. This was raised to 5 yuan in 2021.
The scheme currently covers nearly 1,570 counties across 28 provinces and regions, benefiting hundreds of millions of students, according to the report.
Some local governments failed to follow protocol when bidding for suppliers, the audit report said, citing 52 suppliers appointed for more than 2,600 schools. Supervising departments and school staff bent the law for personal gain, it stated.
China’s local debt crisis has been in the spotlight since Covid-19 stalled the economy, and amid the subsequent sluggish recovery. In February, Beijing ordered local governments to curb excessive fees and fines, levied as they struggled with falling tax revenue and shrinking income from land sales.
Local government debt amounted to 40.7 trillion yuan by the end of last year – the result of a building frenzy funded by state financing vehicles, state-owned enterprises and banks starting in 2008.
Beijing has asked both central and local government agencies to prioritise the use of funds to support livelihoods, pensions and construction projects.
