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The Ministry of Health has ordered larger hospitals to set up internal auditing offices in a move aimed at intensifying the crackdown on financial mismanagement.

New regulations require medical institutions with more than 300 beds or annual revenues of at least 30 million yuan (US$3.79 million) to set up "independent" auditing offices with professional auditing staff.

Corporations and institutes with annual revenues of at least 20 million yuan (US$2.53 million) and subordinate units in the health sector have also been ordered to conduct internal auditing, according to the ministry.

Internal auditors, who are found to be involved in corruption, dereliction of duty, security leaks and abuses of power, will be severely penalized, according to the regulations.

Last month, more than 10,000 cases of illegal charges in the medical sector were reported, including illegal acquisitions and overcharging for services, valued at nearly 800 million yuan (US$101.16 million).

Eight hospitals, including the Peking University First Hospital, were publicly criticized for such practices.

(Xinhua News Agency September 29, 2006)