China penalized or detained 754 officials after auditors uncovered misuse of government money, according to report released Wednesday at a State Council meeting chaired by Premiere Wen Jiabao.

By October this year, the treasury reclaimed 20.87 billion yuan (approximately 2.52 billion US dollars) out of the 28.6 billion yuan (about 3.46 billion US dollars) that was found to be illegally kept by government departments. This was after the National Audit Office investigated the implementation of the 2003 government budget, the report noted.

Meanwhile, the government departments have appropriated 98.78 percent of the funds that were found to be illegally withheld, according to report .

The State Council, the Chinese cabinet, has always placed great importance to correcting the problems found by auditors, the report acknowledged. The government departments have worked hard to improve their internal management after auditors discovered the problems.

The government will continue processing such problems and the work is expected to finish by the first quarter next year, the State Council report said.

The Chinese government will tighten the management on its financial work in an effort to curb corruption while improving auditing, it added.

At the meeting government departments were urged to reduce the cost as much as possible, increase the efficiency funding and work with the auditing department.

The government will draw up a final report on how these problems can be corrected to the Standing Committee of the National People's Congress (NPC), the country's top legislature.

At the meeting, the State Council also passed a draft amendment to Corporation Law and draft law on civil servants and decided to submit them to the top legislature.