Bad accounting puts foundation under scrutiny
Updated: 2012-12-17 18:47
A misplaced decimal point in its financial statement has been blamed for prompting an investigation into a children's charity, after a blogger suggested the organization could be a front for money laundering.
China Charities Aid Foundation for Children, founded in 2009, has now provided a statement of its cash flow in 2011 to a third-party auditing firm in Beijing to check, in the hope of clearing its name.
The results of the audit will be disclosed next week.
The controversy emerged after political pundit Zhou Xiaoyun posted financial details of CCAFC on Sina Weibo, and raised suspicions it was engaged in money laundering.
Zhou questioned the existance of around 4.8 billion yuan ($769 million), listed as cash payments.
In response to the criticism, the CCAFC publicly apologized on Tuesday, attributing the disputed cash flow to an accounting mistake regarding other monetary assets, and uploaded a statement detailing the movement of other assets on its official website as evidence.
The mistake occurred because an accountant from the foundation typed in an extra zero, and no money laundering was involved, according to the initial audit findings.
The charity sector has been under scrutiny in China recently since a young woman calling herself Guo Meimei boasted on Sina Weibo, about her extravagant lifestyle while claiming to work for The Red Cross Society of China
This caused controversy among netizens, who assumed she had embezzled funds. They criticized the society, accusing it of corruption.