Last September, the NAO announced its first audit after sending more than 4,500 auditors to track 76 reconstruction projects with a planned investment of nearly 34 billion yuan in the three provinces.

Auditors found that Anxian county in Sichuan inflated its losses from the quake when planning dike construction in its new county seat.

As a result, central finances allocated an additional 15.5 million yuan to the project. Anxian also refunded the money after the audit.

Wenchuan county, the epicenter of the quake, applied for nearly 2.6 million yuan for the repair and reinforcement of six residential buildings, but the real cost was just more than 900,000 yuan.

The funds of five projects surpassing 26 million yuan were also used for other purposes.

The town of Chengguan in Gansu loaned 8.5 million yuan in rural house reconstruction funds to its district's development and reform committee, which used the money for the resettlement of poor people on a trial basis.

The money was refunded after auditing, the NAO said.

Despite the problems found, the top auditing authority yesterday said reconstruction projects in general proceeded smoothly in the quake-hit provinces.

By the end of last October, 11 of the 72 major reconstruction projects had been completed and 54 launched. A total of 480 of the 753 schools to be reconstructed had been completed and 238 were under construction.

Repair of the 797,900 rural houses in the 22 counties had been also completed. Repairs on 212,900 urban houses had also been carried out, while repairs on 54,400 of the rest were under way.