Authorities say irregularities included embezzlement, fraud, illegal subsidies for staff, and procurement of fancy offices.

　　Yu Lin, deputy head of the Department of Social Security Audit, details how the offenders mishandled the money.

　　"In order to get money from the lottery fund, some departments even came up with fake welfare investment projects, things such as orphanages, rehabilitation centers, or nursing homes. Some of the money ends up going unused, while some is embezzled, to purchase things like cars. "

　　中国彩票资金遭挪用

　　According to China's Regulations on Lottery Management, the money raised through lotteries is divided into three parts: the jackpot for lottery winners, lottery management expenses and fees paid to sales distributors, and funds handed over to the state for social welfare causes.

　　63 billion yuan worth of unauthorized online lottery sales spanning 17 provinces, where online distributors are paid 20 to 60 percent higher than regular ones by local departments, have been uncovered.

　　Yu Lin says such unauthorized online lottery selling doesn't follow regulations.

　　"Under the current managing system, the amount of lottery management expenses and social welfare funds a province or a region get is related to the total lottery sales amount. Online sales break the geographical limits, allowing distributors in one province sell tickets to buyers all around the country, as a result obtaining money that should have belonged to other provinces."

　　Wang Xuehong with the Chinese Public Welfare Lottery Study Institution, Pecking University, says a lack of supervision is part of the reason why unauthorized online lottery sales' are so rampant.

　　"Lottery departments in as many as 17 provinces had been offering direct online channels to their customers, reflecting the country's saggy regulation and supervision on the issue. We should have restrained it from the very beginning, but we didn't. So this is part of the reasons for the problem."

　　The audit covered a total of nearly 230 provincial and municipal-level lottery sales organizations, and nearly 5000 projects funded by lottery sales.

　　The NAO says 14.5 billion yuan of misused funds have been recovered, as of the end of May, while authorities are investigating 90 cases of suspected violations.

　　China's nationwide lottery sales in 2014 totaled 382 billion yuan, or nearly 62 billion US dollars.

　　For CRI, I'm Niu Honglin.