Misappropriation and withholding of up to 237 million yuan ($37.28 million) in project funds have been detected in projects using foreign loans and aid, according to reports published by the National Audit Office yesterday.

According to the report, the audit results show that the misuse of investment was seen in six out of 99 projects in 2010 in agriculture, energy, transport, education, healthcare and urban construction.

These 99 projects have a planned total investment of 424.6 billion yuan, with 34.5 billion yuan in foreign loans and aid from the World Bank, the Asian Development Bank, United Nations Development Program and UK Department for International Development.

The 940-kilometer railway project from Taiyuan, Shanxi Province to Yinchuan, Ningxia Hui Autonomous Region, partly sponsored by loans from the Asian Development Bank, was blighted by problems including fake inspections and transferring of funds to personal bank accounts, according to the report.

The shareholding company, Taizhongyin Railway, spent 25.56 million yuan in foreign capital on items unlisted in contracts. It also faked invoices of over 65 million yuan and transferred 750,000 yuan into a personal bank account.

Another project, the railway from Southwest China's Guiyang to South China's Guangzhou, which saw 9.75 million yuan in investment from the World Bank, was found to have faked tens of millions of yuan in receipts, made purchases without contracts or lied about the progress of the construction, the report said. 

The problems that exist in these projects are caused by a variety of reasons, such as too many agencies and frequent changes in personnel, an unnamed senior official from the National Audit Office told reporters yesterday.

The auditing official also suggested that government departments and companies all pay attention to the management and use of foreign funds, forming a standardized environment for their use.

After the problems were detected, the foreign fund providers, companies and government departments all implemented measures to eliminate the problems and punished the personnel involved in the illegal actions, he said.

The authorities have been looking into the problematic cases, and have recovered the misappropriated funds, the report said.

The reports also covered the auditing results of 34 environmental protection projects, of which 14.175 billion yuan in foreign funds was used by September 2011.

These projects have generally been operating well, though 128 million yuan in six projects had been misused, the report said.