Environmental Audit Investigation on Dust and Sandstorm Prevention Project

1. Environmental Audit Investigation on Dust and Sandstorm Prevention Project Wang Ting Department of Agriculture, Resources and Environmental Protection Audit National Audit Office of the P.R.C

2. 2 OBJECTIVES, OBJECTS AND SCOPE 1 5 BACKGROUND 4 3 PROCESS STANDARD 6 RECOMMENDATION AND RECTIFICATION RESULTS Presentation Overview Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

3. Concurrent Audit PART 1. Background on Dust and Sandstorm (DSS) Prevention Project National Audit Office of the People’s Republic of China (CNAO) The Board of Audit and Inspection of the Republic of Korea (BAI) Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

4. PART 1. Background Concurrent Audit • Conducted independently & simultaneously by the two SAIs • Within respective mandate • Reviewing only its own country’s project • With a separate audit team from each SAI Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

5. PART 1. Background National Audit Office of the People’s Republic of China (CNAO) Beijing Municipal Audit Office CNAO’s Taiyuan Resident Office Department of Agriculture, Resources and Environmental Protection Audit Shanxi Provincial Audit Office CNAO’s Jing-Jin-Ji Resident Office Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

6. PART 1. Background Dust and Sandstorm (DSS) Prevention Project Program of DSS prevention project for the period from 2001 to 2010 Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

7. PART 1. Background • 5 Provinces (Municipalities or Autonomous Region) • 75 Counties • 458 million sq. km. • Total: 57.992 billion Yuan (about 8 billion USD) • From 2001 to 2005 : 21.07 billion Yuan (about 2.9 billion USD) Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

8. Know the project’s general implementation status Promote the successful implementation of project Appraise its performance Objectives Put forth further policy, system, and management recommendations Reveal its problems PART 2. Objectives, Objects and Scope Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

9. PART 2. Objectives, Objects and Scope Objects • The local government departments of • Development & Reform • Finance • Forestry • Agriculture (Stockbreeding) • Water Resource Text Beijing • Project constructing entities • Relevant towns, villages and farmers Tianjin Hebei Shanxi Inner Mongolia 10 Counties Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

10. PART 2. Objectives, Objects and Scope Scope The implementation of the project The management and utilization of project investment Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

11. PART 3. Standard • Law of the P.R.C. on Water and Soil Conservation • Law of the P.R.C. on Grassland • Statute on Conversion of Arable Land into Forest, …… Laws and Regulations • Technical Provision on Forest Construction of Beijing-Tianjin Dust and Sandstorm Prevention Project • Technical Regulation on Closing Hillsides (Sand) to Facilitate Afforestation, …… Project Standards • The Ten-Year (2001-2010) Plan for Beijing-Tianjin DSS Prevention Project • Environmental Gazette, …… Other Standards Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

12. Pre-audit Survey Preparing Work Plan Conducting Audit Investigation Reporting Consolidating Reports PART 4. Process Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

13. PART 4. Process • Pre-audit Survey： • From March to April of 2006 • Department of Agriculture, Resources and Environmental Protection Audit • Collect information Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

14. PART 4. Process • Preparing audit investigation work plan ： • From May to July of 2006 • Department of Agriculture, Resources and Environmental Protection Audit • Formulated the audit investigation work plan Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

15. PART 4. Process • Conducting audit investigation: • From August to November of 2006 • Beijing Municipal Audit Office, Shanxi Provincial Audit Office, CNAO’s Jing-Jin-Ji and Taiyuan Resident Audit Offices • Conducted audit investigation Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

16. PART 4. Process • Audit reporting: • In December of 2006 • Beijing Municipal Audit Office, Shanxi Provincial Audit Office, CNAO’s Jing-Jin-Ji and Taiyuan Resident Audit Offices • Submitted audit reports to the Department of Agriculture, Resources and Environmental Protection Audit Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

17. PART 4. Process • Consolidating reports: • From March to April of 2007 • Department of Agriculture, Resources and Environmental Protection Audit • consolidated Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

18. PART 5. Results The Achievementsof DSS Source Project SomeProblems to be addressed and solved Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

19. Achievements PART 5. Results • Relevant systems are improved, supervision is strengthened, and the overall management and utilization of fund are well regulated. • Rules and Regulations on project building, fund management, examination and acceptance check …… • Project acceptance check and mid-term assessment Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

20. Achievements PART 5. Results • The first phase of the project was completed well. (1) All-round measures in Agriculture, Forestry, Water resources, ……，such as • Conversion of Arable Land into Forest • Closing hillsides to facilitate afforestation • Prohibiting pasture and feeding in pen • Fencing closure treatment Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

21. Achievements PART 5. Results • The first phase of the projectwas completed well. (2) Implementation leading team (Development & Reform dept.) been formed; to strengthen organization and coordination; to safeguard the implementation By the end of 2005, • 12.32 million mu (about 2.05 million acre) land —100.02%, • 3.72 million mu (about 0.62 million acre) grassland ——101.05%, • 5603 water sources control projects ——100.11% • 914.92 km2 covered by small drainage area——100% Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

22. Achievements PART 5. Results • Implementation of the project gained ecological and economic benefits. (1) In contrasting to year 2000, • Desertification area reduced by 25% • Water loss and soil erosion reduced by 32% • Artificial afforestation increased by 18.5% • Forestry resources increased by 24.5% • Forestry and grass coverage both increased remarkably • Dust and sandstorm weather reduced Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

23. Achievements PART 5. Results • Implementation of the project gained ecological and economic benefits. (2) Along with the ecological environment improving in project area and the implementation of some agriculture supporting policies, • the economic structure of local agriculture and pasture has been adjusted • the manner of economy growth has been transformed • the working condition of agriculture and pasture has been improved constantly Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

24. Achievements PART 5. Results • Implementation of the project gained ecological and economic benefits. (3) By the end of 2005, • the cattle population has increased by 38.5% • the overall production of agriculture, forestry, cattle breeding and fishery has increased by 97.7% • the income of farmers (herdsmen) has increased consequently Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

25. Problems PART 5. Results • Some of the fund for pen building was inappropriately utilized. • two counties of Inner Mongolia Autonomous Region • paid too much attention to the rapid growth of their pasture industry • provided majority subsidy only to some larger ranchers • but didn’t consider the effects of encouraging more herdsmen • Such fund appropriation didn’t work well to encourage more herdsmen’s enthusiasm for pasture prohibition and pen feeding Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

26. Problems PART 5. Results • Some completed DSS prevention projects have been destroyed or laid aside 8 cultivating gardens in 5 towns in a county of Shanxi province 2,415,000 Yuan (about USD 333,000) 6665 m2 out of 16,100 m2(41.4%) pens were left unused. Add Your Title in a county of Tianjin 55 out of 1965 water resource facilities were destroyed. 550,000 Yuan (about USD 76,000) paving, man-caused destroy etc.. 9 out of 15 project zones in two counties of Inner Mongolia Autonomous Region pasture fence destroyed due to mismanagement Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

27. Problems PART 5. Results • Some cultivated grassland has degraded for lacking replanting fund. • Main measures ：Grass planting, fly-sowing pasture and fencing closure treatment • Stockbreeding industry’s Special Character: Herdsmen harvested grass before seeds became mature • The funds to replant grass • Some cultivated grasslands have degraded again. Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

28. Problems PART 5. Results • The follow-up supporting policy of the conversion of arable land into forest in project area should be more definite. • The government subsidy for the farmer of the conversion of arable land into forest would expire successively. • Not been confirmed whether the policy would go on or not. • From the audit investigation of some farmers in Hebei province, it is found that if there were no further subsidy or supporting policy, the returned forests might be recultivated as farmland. Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

29. PART 6. Recommendation and Rectification • Audit Investigation Recommendation • Related policy and regulations need to be improved and further clarified. • Set forth subsequent subsidy and supporting policy for the farmers when the present policy expires • Clarify the scope, object and subsidizing procedures of pen building fund, in order to increase the rationality and transparency of the distribution of fund, avoiding deviating from the policy objectives Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

30. PART 6. Recommendation and Rectification • Audit Investigation Recommendation • A compensation system for the ecological benefits of DSS prevention project shall be established. • Forestland cultivated in DSS prevention project should be included into the compensation scope of ecological benefit of central forestry • Ecological benefit compensation fund should be founded. Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

31. PART 6. Recommendation and Rectification • Audit Investigation Rectification • The National Development and Reform Commission and the other administration departments attached great importance to the findings and recommendations of the audit investigation. • the Ministry of Finance, State Forestry Bureau, the Ministry of Agriculture and the Ministry of Water Resources • the local development and reform committees in Shanxi and Tianjin Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

32. PART 6. Recommendation and Rectification • Audit Investigation Rectification • The governments of five provinces (municipalities, autonomous region) valued highly of the findings, and actively adopt measures to rectify them. • One county of Shanxi province • Carefully investigation, measures to improve the efficiency of pen usage • one county of Tianjin Municipality • repaired and rebuilt 30 water resource projects of 55 destroyed projects. Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

33. PART 6. Recommendation and Rectification • Audit Investigation Rectification • the policy of the conversion of arable land into forest was improved, and the ecological compensation work was promoted • the State Council of China issued the Notification of Improving the Policy of conversion of arable land into forest • a special fund for strengthening the outcome of conversion of arable land into forest policy • the State Environmental Protection Administration of China issued the Guidance on Conducting Pilot Work of Ecological Compensation Seminar of ASOSAI in Environmental Auditing, Hangzhou, China

34. Thank You !