Impoverished students read together in Shiqian county, Guizhou province. TAO LIANG/XINHUA

Foul play

Chen first suspected foul play during an overall audit of funds for anti-poverty projects, when she noticed an out-of-date stamp on a document related to a bank loan the company had obtained.

"The stamp gave the game away, because it was from the Gulin Rural Credit Cooperative, but that financial institution changed its name to the Gulin Rural Commercial Bank at least a year before the date given on the document," she said.

Following Chen's breakthrough, the case was handed over to the prosecuting authorities, who are now investigating.

Last year, intensive audits conducted by 140 NAO auditors from the Chengdu branch, resulted in 14 million yuan being recouped and returned to the national treasury. More than 49 million yuan has already been "reactivated" after sitting idle in local governments' bank accounts for many months.

Observers claim the money wasn't used because it would involve too much work for local officials. For example, to relocate villagers, officials from the local government have to first identify a suitable location and then visit people's homes to persuade them to move.

However, if any householders complain or refuse to relocate, the officials' workloads rise. That means many officials do not even consider using the funds to improve people's lives.

Authorities are questioning 35 people in connection with the matter.

The scam in Gulin is just one in a long list of corrupt practices in the allocation and expenditure of funds intended for poverty-alleviation projects.

The National Audit Office has also uncovered cases where local governments used relief money to pay for lavish meals, bribe officials or to provide employees with illicit allowances.

Building on the success of the audit in Gulin and several other counties, the Chengdu branch of the audit office has decided to impose a two-and-a-half-year extension to inspections in 36 counties in Sichuan that are classified as poverty-stricken.

In line with the government's pledge to lift all rural poor out of poverty by 2020, the earnings of 12.4 million villagers across the country were raised above the national poverty line last year. However, 43.35 million people were still living in impoverished conditions at the end of December.

As the 2020 deadline draws nearer, central government departments are strengthening supervision to ensure funds are used as intended.

The Ministry of Finance and the State Council Leading Group Office of Poverty Alleviation and Development have begun a targeted inspection into the use and management of poverty-relief funds in 28 provinces and regions.

The inspection, which mainly focuses on funds allocated in 2015 and last year, will last until the end of June, and is aimed at uncovering irregularities in the allocation and use of funds for poverty relief, one of the central planks of government policy.

Last year, more than 19,000 people across the country were punished for corrupt practices related to the use of poverty-alleviation funds, according to the Ministry of Finance.