EDITORIAL: Wasteful spending

A staggering 236.4 billion yen of taxpayer money was spent in wasteful and otherwise questionable ways in fiscal 2008, according to the Board of Audit's recently released report on its investigation into the government's expenditures.

The amount, a record for inappropriate government spending, is larger than the 220 billion yen target for reducing the annual natural increase in social security spending set by the previous Liberal Democratic Party-New Komeito coalition government.

This figure only represents the tip of the iceberg of what the watchdog could uncover with its limited-scope investigation. The complete picture would likely be far more disturbing.

One dubious practice known as azuke (depositing) involves keeping budget surpluses at contractors by cooking up fictitious orders. The investigation by the board found that this gimmick was used widely by ministries, agencies, local governments and government-affiliated bodies.

The board also uncovered caches of maizokin (buried money), or the part of funds for effectively finished projects that has been left unspent but has been stashed away without being returned to state coffers.

As usual, the audit found many cases in which private contracts were awarded without competitive bidding to businesses offering cushy jobs to retiring bureaucrats. Such deals typically cost taxpayers a lot more than contracts given through bidding.

Taxpayers should be angry about such outrageous wastes of their money at a time when state finances are in a crisis and people are suffering from a harsh recession.

Eliminating waste and inefficiency in government spending is the most important policy promise made by the government of Prime Minister Yukio Hatoyama. In line with this pledge, the Government Revitalization Unit, tasked with ferreting out unnecessary and wasteful expenditures, is reviewing hundreds of programs.

Many of the programs identified by the task force as problematic, such as the GX rocket development project, were also criticized by the Board of Audit for inefficiency.

The two systems for scrutiny of government spending should be regarded as essential and mutually reinforcing weapons for eradicating wasteful outlays.

The findings from the board's investigation can be used by the government's team for more effective evaluation of expenditures by government organizations.

However, it is necessary to enhance the board's functions, powers and resources drastically.

Of the inappropriate accounting practices that have been pointed out to date, 481 cases involving 13.1 billion yen remained uncorrected, according to the report.

The government should empower the board to order measures to fix the problems in such cases while establishing punishment for inappropriate accounting practices by government branches and affiliated entities.

To deter wrongdoing involving entire organizations, the government should consider creating a leniency program that grants whistle-blowers exemption from or reduction in punishment.

The board's 1,300-strong workforce should be expanded. One way to accomplish this is to hire more outside experts such as lawyers, prosecutors and certified public accountants who have experience tackling misuse of public funds.

The Board of Audit, established according to the Constitution, is a politically neutral institution independent of the Cabinet.

Neutrality is the most important factor for the effectiveness of the board's operations.

But officials of the board continue to retire into plum jobs at government-affiliated organizations subject to audits by the watchdog. This amakudari practice should stop.

Before the August Lower House election, both the ruling and opposition parties at that time submitted bills to the Upper House to beef up the board. But these bills have all since been scrapped.

We hope the government and the Diet will start afresh working on legislation to strengthen this vital organization.

--The Asahi Shimbun, Nov. 14(IHT/Asahi: November 16,2009)