An audit report released by the Ministry of Health yesterday records several cases of financial misconduct involving the National Committee for Oral Health (NCOH).

The report revealed that the NCOH, a small but "clever" advisory body that was dismantled in April after its operations came under public scrutiny, made unauthorized endorsements worth about 2.09 million yuan (US$273,000) between 1997 and 2006.

The report also found, without naming any names, that the committee's "primary responsible party" had illegally claimed about 74,200 yuan as a housing subsidy and 46,000 yuan as a duty allowance during one two-year period.

The NCOH has been at the center of several financial scandals, including one involving an unlawful 500,000 yuan loan to a Guangdong-based toothbrush producer in 1994. The loan was not recovered in time, resulting in a loss of 154,000 yuan, the report said.

The NCOH was created by the ministry in 1988 to promote oral health, but it regularly overstepped its authority over the years.

Media reports said that with only six regular staff, the committee approved, certified or endorsed at least nine products, including Crest toothpaste and Lotte chewing gum, in exchange for cash.

In the former case, Proctor & Gamble (P&G China), the makers of the toothpaste brand, allegedly donated 10 million yuan to the China Oral Health Foundation, whose secretary-general was also deputy chief of the NCOH, in 2002.

An earlier ministry audit discovered that the committee's expenses during the past decade amounted to 28 million yuan.

An official probe into the NCOH's financial affairs began last November, shortly after the committee became entangled in a high-profile lawsuit over its right to authorize products.

Its duties are now carried out by an oral health division established by the ministry when the NCOH was suspended.

The audit report did not evaluate the first nine years of the NCOH's operations.

"The organization was not involved in financial activities in its early years," health ministry spokesperson Mao Qun'an said.

Despite the recent scandals, Mao said, the group "had done a significant amount of work and provided considerable technical support".

"Efforts to promote oral health must go on," he added. "It would be a mistake to associate such efforts strictly with the NCOH, or the NCOH with particular individuals who worked for it."

Mao said his ministry will tighten supervision of its subsidiary entities.

Any remaining issues related to the incident will soon be resolved, he added.

(China Daily June 12, 2007)