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For the year 2006 China's National Audit Office (CNAO) has discovered 7.1 billion yuan (US$816 million) in illegally used social security funds, said Auditor-General Li Jinhua on Monday.

The 7.1 billion yuan was illegally borrowed, used or deposited. The amount includes 2.3 billion yuan that was misused before 1999.

The CNAO audited the pension fund for enterprise employees, the medical insurance fund for urban employees and the unemployment insurance fund in 29 regions and five selected cities, said Li at the annual conference of national auditing authorities.

Li said seven special funds, worth a total of more than 1 trillion yuan (US$128.2 billion), were audited in 2006. .

They're used for transfer payments to local governments, social security, public housing, natural forest conservation, the resettlement and control of geological disasters at the Three Gorges areas and the control of sand storms in the Beijing-Tianjin region.

Li said the management and use of the funds was generally good despite the problems discovered.

The audit of the Three Gorges resettlement fund discovered 200 million yuan was illegally claimed or used and five cases of misappropriation have been given to judicial institutions.

Li said this year the CNAO would strengthen auditing and supervision of public service sectors as well as special funds covering agriculture, education, medical, social security and environmental protection.

(Xinhua News Agency January 9, 2007)