A top Chinese official warned China’s politicians on Thursday that local governments must better manage their debts and investments or risk derailing economic development, reports Chinese news agency Xinhua.

Liu Jiayi, the auditor general at the National Audit Office and China’s top auditor, told the Standing Committee of the National People’s Congress that some provincial governments have relied too much on new borrowing to pay back old debts.

According to a report Liu submitted to the powerful political committee, debts at 18 provincial governments have risen sharply, reaching 3.85 trillion yuan ($626 billion) by the end of 2012.

That’s a debt increase of 13 percent over the past two years, with almost half of the debt scheduled for payback after 2011.

Audits of state-owned enterprises also uncoverered poor management and standards directly leading to losses of 4.56 billion yuan. Some state groups falsified sales figures and costs to evade taxes, while others invested in projects without proper approvals.