China's cabinet moved to tighten controls on social security funds on Wednesday after hearing how parts of the country were plagued by embezzlement.

Misappropriated funds must be paid back in full within strict time limits and the officials involved should be punished, the State Council agreed at a meeting presided over by Premier Wen Jiabao.

The misappropriation of social security funds was highlighted in September by the Shanghai scandal, involving 3.2 billion yuan of city funds, which brought down Chen Liangyu, secretary of local committee of Communist Party of China (CPC).

The National Audit Office delivered a report to the council on the results of a nationwide audit of social security funds in the past two months.

The funds were growing with the expansion of coverage expansion, but policies regarding management were not strictly implemented in some regions, the council heard.

It ordered the responsible departments to coordinate and ensure funds were kept in special accounts with separate management over collection and expenditure.

The social security framework includes five main insurance programs: pensions, unemployment, medical, injuries at work, and pre-natal and post-natal care for women workers.

By the end of 2005, China's social security funds totaled 1.84 trillion yuan (233.35 billion US dollars).

Councilors called for enhanced transparency in fund management and public supervision.

They ordered government bodies to draw up measures to improve fund investment returns.

State councilors also discussed and approved in principle the draft of the law on urban and rural planning.

Editor: Donald