BEIJING -- China will speed up the rebuilding of shantytowns and tighten the auditing of funds used in such projects in the next five years, according to a report in Monday's People's Daily.

"Deregulation and improper management of shantytown rebuilding have been found by auditors," Chen Taihui, head of the National Audit Office's social security auditing department, told the daily, the flagship newspaper of the Communist Party of China.

China's shantytowns are shabby residential areas that were built when the country started to industrialize its economy, and people living there are generally low-income factory workers.

Chen's remarks came after 6,623 such renovated houses in Lanzhou, capital of northwest China's Gansu Province, were found to have been illegally sold to buyers not among the low-income wage earners for whom they were intended, the report said.

The central government allocated more than 150 billion yuan ($24.52 billion) in subsidies to finance such housing projects for 12.6 million households from 2008 to 2012, according to the report.

In addition, the central authorities have decided to rebuild another 10 million such houses over the next five years in order to tackle housing problems for low-income households.

Shantytown rebuilding had been carried out in 80.47 percent of China's city or county-level areas by the end of 2012, and the per capita living space has seen a 30-percent increase in those renovated areas, the report said.

Other problems such as embezzlement of funds and misappropriation of affordable housing were also disclosed by the People's Daily.

"We will organize auditors at all levels to conduct follow-up auditing on the rebuilding of shantytowns," it quoted Chen as saying.