Greater say should be given to senior academics to decide on the use of the funds, said Chu Zhaohui, a senior researcher at the National Institute of Education Sciences.

"They're professionals and they're able to judge whether a research project is useful or not," Chu said.

The distribution of funds is now sometimes decided by government officials or administrative personnel at the universities.

Li Chang'an, a professor at the University of International Business and Economics in Beijing, said that China should explicitly stipulate the exact income proportion that a researcher can get from a research project, in line with similar rules already in place in the United States and Japan.

"In China, there's no rule at all for the proportion of a researcher's income that can be derived from scientific research projects. Surely misuse prevails since everyone wants to get more money from a research project," Li said.

The proposals come after the Ministry of Education issued documents last month to boost the management of scientific research funds.

Universities — an important source of innovation in the basic research and high technology fields — have been getting increasing funds for scientific research projects in recent years, according to a statement released by the ministry on its website on Monday.

"But misuse of those funds is being seen quite often among some researchers and universities. Some were even punished," it said.

Observers said that funds often go to researchers who maintain good relations with government officials, rather than those seeking to conduct real scientific research.

Universities are being asked to boost their supervision of scientific research funds by setting up financial information disclosure mechanisms, according to the documents issued by the ministry in December.

The documents state that it is illegal to fraudulently obtain, divert or misappropriate funds for scientific research projects.

In 2011, China spent 868.7 billion yuan ($137.89 billion) on scientific research and development, according to a joint report published in October by the National Bureau of Statistics, the Ministry of Science and Technology and the Ministry of Finance.

Of the total expenditure, universities spent 68.89 billion yuan, up 15.3 percent year-on-year, the report said. (China Daily)