The National Audit Office (NAO)found misuse of funds totaling 9.06 billion yuan (about 110 million US dollars) in 38 government departments in 2004.

The figure represented six percent of all the funds put under audit, NAO auditor-general Li Jinghua said Tuesday when reporting the performance of the central budget in 2004 and audit work of other fiscal revenues and expenditures to the Standing Committee of the National People's Congress.

Auditors found that 12 departments obtained from the central government an extra of 491 million yuan (59 million dollars) in budgeted funds through such malpractices as adding more people to payrolls, submitting nonexistent projects and randomly raising budget standards.

Li said that 26 departments misappropriated financial funds totaling 1.07 billion yuan (129 million dollars) and 14 others transferred financial funds totaling 935 million yuan (113 milliondollars) to their subordinate departments or other relevant organizations.

Other malpractice, according to Li, include putting away funds in "small exchequer" and misuse of funds earmarked for special projects.

Some government departments even diverted funds originally budgeted for special projects into building homes and offices, he added.

By August of last year, the State Reserves Administration had reserve materials totaling 1.4 billion yuan (169 million dollars) that had been borrowed out before 1994 but not returned, accordingto the report.

And also by the end of 2004, China had appropriated 266 millionyuan (32 million dollars) in reserve funds for the purchase of Chinese medicinal herbs, 227 million yuan (27 million dollars) of which was either missing or misappropriated.