A quarter of China's lottery funds have been misappropriated, according to the country's first large-scale audit of the industry, which has called for a prompt cleanup.

A total of 16.9 billion yuan ($2.72 billion) in lottery funds were used illegally, the National Audit Office said on Thursday. This represented more than 25 percent of all lottery funds received between 2012 and last year.

A report on the office's website said the audit - carried out in November and December - covered 18 provinces and 228 lottery sale institutions nationwide, as well as 4,956 lottery projects involving public welfare funds.