A total of 1,200 individuals have been punished for irregularities in the handling of funds for rural students' nutritious meals, according to an audit report submitted to the Standing Committee of the National People's Congress, China's top legislature, on Sunday.

The National Audit Office began urging rectification after the problem was discovered during an audit last year. The amount involved in the rectification reached 4 billion yuan ($550 million), with 248 work measures optimized, according to the report.

It showed that 66 counties with misappropriation of the funds involving 1.95 billion yuan have returned or paid back the money, and 121 counties have canceled contracts with 147 unqualified food suppliers.

While improving the threshold of food providers and strengthening the safety inspection of food entering and exiting warehouses, the supervision of food procurement and bidding have also been tightened, it added.

"Six central authorities jointly issued guidelines to intensify the management and supervision of food safety and dietary funds in primary and secondary schools after the problem was exposed, in order to ensure that every penny could be used for rural students," Lin Hai, an official from the National Audit Office, told China Central Television.