Large amounts of construction funds for China's water conservation projects have been mismanaged, according to an audit report issued on Wednesday.

The report, issued by China's National Audit Office (CNAO), says CNAO audited management and use of 71.6 billion yuan (about 8.9 billion U.S. dollars) of construction funds for China's water conservation projects from 2002 through 2003, which accounted for 77 percent of total construction funds for water conservation projects in this period.

The audit, carried out in 2004, revealed that more than 3.5 billion yuan (437.5 million U.S. dollars) of funds had been retained for no sound reason and nearly 1.4 billion yuan (175 million U.S. dollars) was used improperly.

The report says nearly 1 billion yuan (125 million U.S. dollars) had been used for purposes other than water conservation projects, including building hotels and issuing more subsidies and bonuses to staff members in some projects.

Source: Xinhua