Twelve prefectures misused as much as ¥550 million in central government subsidies over a five-year period to March 2007, sources on the Board of Audit said Oct. 18.

The constitutional auditing institution, which is independent of the Cabinet and the Diet, will ask the 12 prefectural governments to return the misused subsidies and investigate all other prefectures for accounting irregularities, the sources said.

The 12 prefectures, which were checked at random by the board, are Aomori, Aichi, Fukushima, Gifu, Gunma, Hokkaido, Iwate, Kyoto, Nagano, Oita, Tochigi and Wakayama. Aichi misused the most funds, the sources said.

In many cases, the prefectures handed some of the funds to companies by pretending to purchase office goods and stationery, such as copier paper, from them. The money was then allowed to accumulate in company accounts as slush funds for the governments, the sources said.