Millions of dollars in funds for China's high-speed rail link between Beijing and Shanghai were embezzled in 2010, the state audit agency has said.
Officials said 187m yuan ($28.5m; £17.5m) had been stolen by individuals and construction companies. The judicial authorities are investigating.
China's railways minister was sacked last month over corruption allegations.
Work on the high-speed rail link began in 2008 and is due to be completed in June - a year ahead of schedule.
The 1,318 km (820 mile) rail link is the centrepiece of China's rapid expansion of high-speed railways networks across the country.
It will be able to carry 80 million passengers a year - double the current capacity, and will cut travel time between the two cities from 10 hours to about four.
With its huge budget the project has attracted corruption - a pervasive problem in China, says the BBC's Martin Patience in Beijing.
"This year we will continue to focus on uncovering major violations of laws and regulations and economic crimes [in the project]," said Xu Aisheng, a senior official at the National Audit Office.
He said the embezzlement had been carried out by some construction companies and individuals.
Auditors also found evidence of improper bidding processes and the filing of fake invoices for accounting purposes, he said.
The revelations come just a month after the Railways Minister Liu Zhijun was fired for allegedly embezzling more than 800m yuan.
Mr Liu is alleged to have received huge bribes when handing out contracts for the new rail network.
He has not publicly commented on the allegations against him.