More than 70 percent of net proceeds from land sales in 11 Chinese cities, or 186.41 billion yuan (12.52 billion U.S. dollars), were not included, as stipulated, in the budgets of local governments, the country's audit authority said in a report released Wednesday.

The finding was among several violations discovered in an audit campaign launched by the National Audit Office (NAO) in 2007 to look into land sales in 11 cities from 2004 to 2006.

The 11 cities included Beijing, Shanghai, Tianjin, Chongqing, Harbin, Hefei, Jinan, Changsha, Guangzhou, Nanning and Chengdu.

China has stipulated that land users have to pay fees for their use of land to local governments, as the country's land was solely state-owned.

Such proceeds should be paid into a special account of local governments, and net proceeds, excluding fees such as service charges, would be submitted to the exchequer and become part of the budget of local governments to exclusively support infrastructure constructions and land development.

Land proceeds have been a major source of income for local governments. The NAO report showed net proceeds from land contributed about 26 percent of the budget to local governments of 11 cities over the three years.

Total proceeds from land in these 11 cities were 351.04 billion yuan from 2004 to 2006, and net proceeds stood at 261.87 billion yuan, the report showed.