Recently, procuratorial organs are investigating a case involving a housing provident fund center in a certain place, where the business department director easily embezzled tens of millions of yuan simply by imitating the handwriting of loan-seeking employees. Reporters visiting multiple places across the country found that trillions of yuan in funds are scattered across hundreds of housing provident fund centers nationwide. From ministries to provincial, municipal, and county-level provident fund management departments, there is only a loose guidance and management relationship. Supervision appears complete, but no institution can truly "control" it.

Some experts believe that according to the Property Law, the ownership of the provident fund belongs to the depositors, and the value-added income should be used by the depositors. However, it is also taken away by local governments, and the provident fund has become a "slush fund" in many places. At the same time, the "supervision power" over the provident fund exists in name only, making misappropriation very convenient.

Data from the Ministry of Housing and Urban-Rural Development shows that as of March 2014, there were 106 million actual depositing employees nationwide, with total deposits of 6.47 trillion yuan and a deposit balance of 3.27 trillion yuan. The provident fund balances managed by various provident fund management centers range from hundreds of millions to hundreds of billions of yuan. Such huge funds have become "Tang Monk's flesh" in the eyes of some people.

In the provident fund case in Tonghua City, Jilin Province, reported last year, the former director of the provident fund center, Che Shigang, and some subordinates illegally misappropriated housing provident funds amounting to more than 1.1 billion yuan.

Who is managing the trillions of yuan in provident funds? According to the current "Regulations on the Management of Housing Provident Funds," supervision of the housing provident fund system mainly consists of financial, audit, and social supervision. The "Measures for Administrative Supervision of Housing Provident Funds" stipulates that the Ministry of Housing and Urban-Rural Development and provincial (autonomous region) housing and urban-rural development departments, together with relevant departments such as finance, the People's Bank of China (branches), and the China Banking Regulatory Commission (dispatched offices), also have the responsibility to implement administrative supervision over the implementation of housing provident fund management regulations and policies in various cities.

In fact, from the Ministry of Housing and Urban-Rural Development to provincial, municipal, and county-level provident fund management departments, the relationship between each level is only loose.

Zhu Jianming, deputy director of the Suzhou Provident Fund Center in Jiangsu Province, said that the management of the provident fund is neither fish nor fowl: the provident fund center is not for profit, but it manages hundreds of millions of funds. It adopts a territorial supervision model, that is, the deposit, use, and account balance of the local housing provident fund are supervised by the local government. Nominally, it is managed by the provident fund management committee of the same level of government, but in reality, it is just a name. Central ministries and provinces only supervise the provident fund in terms of policy.

"The 'golden rice bowl' encounters local 'local policies.'" said Li Shengguo, director of the Housing Provident Fund Management Center in Huanggang City, Hubei Province. If a branch president of a bank always illegally misappropriates deposits for stock trading, even if he is lucky enough not to incur losses, in most cases, the branch and head office supervision departments will discover and investigate. However, provident funds are all managed by local management methods. "It's hard not to follow the instructions of local officials, otherwise even the center director's hat will be removed."

Some directors of provident fund management centers reported that the provident fund center has become a private plot of local governments. The less developed the region, the less supervision the local government has over the provident fund center, and the provident fund gradually becomes government funds.

The most prominent manifestation is that banks want to attract deposits, and local governments, in order to get bank loans, will also "signal" the provident fund center to choose specific banks for deposits. There are many black-box operations in this process, and black-hole rent-seeking behaviors occur from time to time.

A relevant person in charge of a provident fund management center in a prefecture-level city in Hubei complained to reporters: the considerable amount of provident funds has become a bargaining chip in the game between local governments and financial institutions. Local governments issue special documents to implement deposit-loan linkage with local financial institutions, depending on how much each financial institution lends to the local area, and then consider using provident fund money for targeted deposits in banks. When provident fund deposits mature and are renewed or when needed, government approval is required. This kind of thing is very common.

Chen Jie, deputy director of the Real Estate Research Institute at Shanghai University of Finance and Economics, believes that according to the Property Law, the ownership of the provident fund belongs to the depositors, and the value-added income should be used by the depositors. However, it is also taken away by local governments, and the provident fund has become a "slush fund" in many places. At the same time, the "supervision power" over the provident fund exists in name only, making misappropriation very convenient.

"Such a large sum of money related to the vital interests of the people, the biggest fear is that management falls into the routine of officials protecting each other." said Liang Rong, director of the Real Estate Research Center at Inner Mongolia University. The several inspections organized locally each year have clear time prompts. If one wants to cope, preparing materials in advance is enough.

Yang Xuefeng, director of the Beijing Provident Fund Management Center, believes that there are many forms of supervision over the provident fund now. At most, five or six batches of auditors from the national to local levels come in a year, but it is not that one person works and two people supervise can be effective. To be truly effective, the effectiveness and transparency of supervision must be ensured, and it must rely on changes in systems and mechanisms as well as changes in working methods.

Reporters learned that the Ministry of Housing and Urban-Rural Development has been promoting the construction of a housing provident fund operation supervision system. In February 2012, the Ministry of Housing and Urban-Rural Development proposed to strive to cover the supervision system to 100 cities nationwide by the end of 2012, mainly for monitoring to ensure the safe operation of housing provident funds, thereby breaking the traditional pattern of housing provident fund accounts being supervised only by local governments. However, due to the sluggish progress of reforms in the entire provident fund field, this work has not yet made substantive progress.

In 2014, the Ministry of Housing and Urban-Rural Development once again listed the national networked monitoring of housing provident funds as a key task to be carried out that year. A director of a local provident fund management center said that this is at least the third consecutive year that national networked monitoring of provident funds has become a key task. However, some places have become accustomed to using the provident fund as a supplementary financial resource and a slush fund, and there is great local resistance to implementing a unified national regulatory reform. "To advance reform, one must dare to take real action and tackle tough issues. Otherwise, what's the use of listing it as a key task year after year without accomplishing it?"