Liu Jiayi, head of the National Audit Office (NAO), said this when he briefed lawmakers on the audit of the central government 2014 budget.
He said majority of violations took place in sectors involving public funds, state assets and state-owned resources, such as land and mining.
In particular, auditors found that over 780 billion Yuan ( 1 US Dollar equals - 6.21 Chinese Yuan ) originally earmarked for land transfers was misappropriated by officials to fill administrative expenses gaps, lent to others or used to construct new office buildings and venues.
Violations were also detected in the transactions and approval of mining rights and in the use of key national special funds.
According to Liu, an audit that involved 2,448 mining rights suggested malpractices in about one third of the cases.
He said separate probes revealed that close to 10 billion Yuan in urban security housing funds and some 1.7 billion Yuan in lottery were misappropriated or siphoned.
He said it was also discovered that intermediary agencies also played a vital role in cases where officials abused their power and colluded with outsiders.
For instance, Hunan development and reform commission chief economist, Yang Shifang, and his associates allegedly stole about 13 million Yuan by allowing three agencies run by their relatives to grant investment subsidies to ineligible companies.
The auditors also uncovered 5 billion Yuan in illegal gains by officials and their close associates who profited from privileged information concerning state-owned resources, development plans and stocks.
He cited an unnamed relative of former China Southern Power Grid deputy general manager Xiao Peng, who saw his stock market investment grow by 50 percent annually for eight consecutive years while sustaining no losses.
“Malpractice was also detected in news media coverage and in attracting foreign investment where under-the-table deals were sealed in the name of public welfare and government policy implementation,” Liu said.
Deliberating the report Sunday, Luo Liangquan, member of the National People’s Congress (NPC) Standing Committee, called for deepening reforms on fiscal and taxation system.
He also urged the government to strictly manage budgets, enhance the transparency in using public funds and intensify the fight against corruption.