Nearly 10 billion yuan (US$1.6 billion) allocated or raised for affordable housing projects was embezzled by contractors, financing platform operators and government bodies in 2014, China's top auditing authority has found.

Around 200 audited entities illegally used the targeted funds to make loans and repay debts, or for investment and operation expenditure, according to a report published by the National Audit Office yesterday.

China earmarked 560 billion yuan to promote affordable homes last year, while companies and official agencies involved in the projects raised another trillion yuan through bank loans and corporate bonds.

Excessive taxation, default in arrears and homes used for profit were other problems discovered by the agency.

It said cases of suspected law violations are under investigation and more than 4 billion yuan of misused funds had been recovered as of June 10.

The audit, conducted from January to March, covered more than 40,000 companies and government agencies and almost 300,000 homes nationwide.

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