The Chinese government will launch an audit campaign to examine pension funds under provincial and city supervision following the Shanghai pension fund scandal that involved millions of misused dollars.

The campaign is designed to ensure that no other large-scale government pension fund is misappropriated, said Li Jinhua, auditor-general of the National Audit Office (NAO)

The campaign is to cover all major cities and provinces, expanding beyond a campaign in August that involved social security funds of 29 provincial regions and five major cities.

In September, Shanghai municipality revealed that more than 3 billion yuan (US$370 million) had been misappropriated from its pension fund, which covers a population of 12 million people, and invested in highway construction and property deals.

By law, pension funds can only be invested as bank deposits or in national bonds or securities.

The NAO revealed in November after the August audit that its investigators uncovered 7.1 billion yuan, or US$900 million, in pension funds misused in overseas investments, construction projects and unauthorized lending.

But social security funds at county level are not included in next year's auditing plan, leading to worries that more problems are yet to be uncovered.

Most of social security funds are operated by cities and counties and only a few by provinces, said Li Shaoguang, a researcher with the public administration college of the Beijing-based Renmin University.

He suggested that social security funds should be submitted to operation by financial institutions entrusted by governments, instead of governments themselves.