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From Special, page 6, issue no. 369, May 26, 2008
Translated by Liu Peng
Original article: [Chinese]

As aid donations for quake-hit areas in China climb into tens of billions of yuan, public concern over how the funds will be used has intensified.

As of noon May 26, donations raised through organizations in affiliation with the Chinese Civil Affairs Ministry totaled 30.9 billion yuan.  

The Ministry had last week in a press conference stressed that the funds would be strictly monitored to ensure proper usage, meeting the needs of quake victims and eventual reconstruction efforts for areas affected by the 8-magnitude earthquake that hit Sichuan on May 12.

Funds Distribution
The major forces behind the donation drive are all official or semi-official organizations, including the Red Cross Society of China, China Charity Federation, China Foundation for Poverty Alleviation, and China Youth Development Foundation.

The EO learned that donations would be spent in phases according to needs. During the first phase, funds were mainly spent on emergency rescue and relief, relocating affected victims and meeting their daily needs.

China Charity Federation (CCF) secretary Liu Guolin said: "Our priority is to purchase tents and tarpaulin houses for sheltering quake victims."

Liu added the Federation had deployed facilitators to quake areas to liaise with local governmental agencies and charity branches, and thus could send back accurate information on relief materials most needed in the disaster-hit zone.

The China Foundation for Poverty Alleviation (CFPA) secretary Wang Xingzui said as donations came both in cash and in kind, some of the materials collected were not the most needed at the moment but could come in handy in the future. Thus, the collection must be dispersed in stages according to the situation on the ground.

The second phase of relief would be the long-term post-disaster rehabilitation, and that required active participation from charity organizations.

"We usually go for long-term projects, such as building safe and permanent housing for the needy. After we have finalized the project funding, we will ask the local charity branches to send us a post-disaster reconstruction plan and review it. If the plan is approved, we will appropriate the corresponding funds," said Wang.

For CCF, some of the donors had specified the usage for their contributions, such as for food distribution or school projects.

"For targeted donations, we have signed a contract with the donor concern and will use the fund strictly in line with the contract. As for non-targeted donations, we will come up with a detailed spending plan," said Liu.

As for the Red Cross Society of China (RCSC), which has the widest coverage for the donation drive, its activities in the relief works include coordinating with the Civil Affairs Ministry, engaging in relocation of affected victims, inviting foreign medical teams to disaster areas.

"Different from RCSC, we are engaged in helping affected children and youth, providing financial supports to the Hope Schools (schools for poverty-stricken areas) in quake-hit areas," said Yang Xiaoyu, secretary of the China Youth Development Foundation.

Donations Supervision

	Red Cross Society of China		China Charity Federation	China Foundation for Poverty Alleviation	China Youth Development Foundation
Donation Raised (Yuan)	7.655 billion (May 24)		836 million (May 21)	256.7398 million  (May 26)	87 million (May21)
Management Fees	None		Yes	10%	Unavailable
Funds Distribution	Buy relief materials, build houses, schools and clinics, recruit & deploy relief workers		For emergency relief, support tents and medicines	Build schools, transitional  homes; buy and transport food medicines,  tents and clothes	Support   educational needs build temporary classrooms
Supervision Mechanism	Accounts checked by National Audit Office yearly	Donation details published on its official website daily; accounts check by National Audit Office and professional auditors		Publishes list of inventories distributed; plans            to hire professional auditors	Publish donor list on its official website; its account will be made public once cleared by the Civil Affairs Ministry

Since May 13, the Civil Affairs Ministry had started publishing on its website the listing of donations raised. Major charity organizations also followed suit, yet accounts of detailed spending were still lacking.

The current donations supervision mechanism include officials making public announcements (apart from website disclosure, the Central and Sichuan local governments also hold daily press conference), thus enabling public scrutiny; in addition, foundations would acquire the service of professional auditors and they would be monitored by the government.

For example, the National Audit Office had already stepped in to monitor the relief funds collection and distribution process of the RCSC, according to the latter's official.

The Society had been under public ridicule of late, as misinformation in the amount of tents purchased – 18,510 tents at 21.75 million yuan was stated as 1,800 tents – had led netizens to question the cost per tent involved.

Regarding calls by netizens for the Society to be more transparent and disclose the full details of its relief account, its relief department vice-director Wang Ping replied: "At the moment, we have yet to focus our energy on this matter due to limited manpower."

"We are still busy on sourcing for what are the most urgently needed materials, formulating disaster relief plans and so on. In addition, we already have a set of monitoring mechanism, as the National Audit Office goes through our accounts yearly," he added.

Regarding public scorn over charity organizations charging management fees, CFPA's Wang Xingzui explained: "For those foundations that didn't charge management fees, maybe only 60%--70% of the donations will be delivered to the hands of those in need."

"But if we charge 10% management fees, 90% donations will likely flow into the pockets of the victims. We need money to keep our operation running. If we have surplus management fees, we would make a full disclosure to the public," he added.

The Chinese government had on May 20 issued a circular to all levels of governmental bodies, listing the important issues related to management and supervision of the distribution of disaster relief materials and funds.

The circular listed five broad areas for attention, including the setting up and standardizing of collections and distribution; professional auditing; maintaining transparency and tough disciplinary action against corruption and abuse.