Haibao's welcome to Shanghai in the form of a World's Fair last year paid off for the city, though gremlins managed to make hundreds of millions of yuan disappear.

In a new report, the Shanghai government says last year's World's Fair turned a profit of just over 1 billion yuan, or around $165 million, a rarity for such an event. Yet, the fine print (in Chinese) also suggests some 242 milllion yuan in cash from Expo ticket sales and sponsorship can't be accounted for.

The Shanghai World's Fair was an expo of superlatives – 246 nations, 73 million people, eight-hour lines and the promise of creating better cities and better lives – headlined by Haibao, a blue Gumby look-a-like mascot who sported a pompadour.

The government auditor's tally, published on the eve of last week's National Day holiday, says the event generated 13 billion yuan in revenue from ticket sales and sponsorship, exceeding expectations by more than 1 billion yuan.

Government auditors who published the accounts noted that there were no severe cases of misappropriated funds.

Still, they cited a number of instances of questionable accounting. Perhaps that's not a surprise, considering the report was published in a week when financial regulators from Hong Kong to Washington doubt on Chinese corporate accounting.

Cash sponsorship payments and ticket sales worth 242 million yuan, the auditors said, never showed up in official Expo accounts, raising possibilities that some sponsors reneged on pledges or that payments got pocketed somewhere along the way. The report estimates in-kind sponsorship donations worth another 48 million yuan weren't properly recorded as event revenue, highlighting other possible shenanigans.

The report described these accounting irregularities only in general terms.

According to the audit, the government concedes the 19.7 billion yuan cost of building and running the 5.28 square kilometer Expo park went over budget.

A chunk of the extra cost for Shanghai reflected how Shanghai subsidized the participation of some countries. Many nations spent so lavishly on their pavilions that Shanghai decided to make them permanent. But others let the hosts foot the bill.

Among the bigger items among the 1.7 billion yuan in cost overruns, according to the budget report, were losses Shanghai absorbed in paying to build national pavilions for countries that preferred not to invest. The budget doesn't get into the details but a number of warehouse-like regional pavilions housed exhibits from poorer nations.

The audit said an additional 350 million yuan in costs associated with cleaning up after the event weren't included among the costs, which presumably would have reduced operating income by about a third.

Expos don't normally make money. Hanover's 2000 World's Fair -- the last full-scale international registered exhibition prior to Shanghai's -- recorded a loss of roughly 1 billion euro, according to a 2009 Xinhua interview with Wolfgang Schatz, CEO of the EXPO 2000 Office for the City of Hanover.

The expectation of losses is part of the reason U.S. Congress won't authorize State Department spending to participate in World's Fairs – a policy that caused hiccups in getting a U.S. pavilion off the ground in Shanghai, since organizers needed to drum up private sector sponsorship.

Shanghai authorities adopted a similar budget strategy as their counterparts in Beijing did when they reported a $170 million profit for hosting of the 2008 Summer Olympic Games. Narrow definitions of "costs" in both cases ignored tens of billions of dollars the cities spent in pre-event makeovers, like new subway lines and airport terminals, and over-the-top security.

Call those items off-balance-sheet infrastructure spending.

Corrections & Amplifications

The first name of Wolfgang Schatz, CEO of the EXPO 2000 Office for the City of Hanover, was misspelled as Wofgang in an earlier version of this article.

-- James T. Areddy. Follow him on Twitter @jamestareddy