An annual report published by the National Audit Office on Friday revealed widespread malpractice in the administration of the nation's low-income housing projects.

Experts suggested that the authorities should reconsider whether the project is achieving its aims.

China built 5.9 million new affordable houses for 9.53 million low-income families in 2012. The entire project involved an investment of 412.9 billion yuan ($67.39 billion) from the fiscal budget, said the report. 

But 108,400 households involved were revealed to be unqualified to receive "low-income" benefits, and another 11,300 were found to have received multiple homes under the policy. Meanwhile, 34 projects were discovered to have been illicitly let by local governments, and nearly 5.8 billion yuan has been embezzled by local authorities, said the report.

By the end of June, 52,700 people had been disqualified from the project, and more than 44 million yuan in subsidies had been withdrawn, while 4 billion yuan of embezzled funds had been recovered.

Evidence of 26 other economic crimes was also uncovered during the investigation, and turned over to the legal authorities.

The Ministry of Housing and Urban-Rural Development said on Friday that construction of another 5 million new affordable houses across the country had begun by July. But reports published by local authorities show that even legitimate projects are troubled by high vacancy rates.

Yin Kunhua, a deputy director of the Shanghai Real Estate Study Association, told the Global Times that the policy must change as it has deviated from the original intention.

"For urban residents with low incomes, the housing issue is closely related to their jobs. Since most affordable houses are located in remote areas that lack infrastructure, they can hardly solve their needs as they work downtown,"Yin said.

Chen Jie, director of the Housing Policy Studies Center at Fudan University said current affordable housing policy need to be refocused on providing homes for those that need them.

"Right now, the authorities are trying to use it as a tool to promote the local economy and the urbanization process. So people who need affordable housing still aren't getting it," Chen said.