The State Administration of Coal Mine Safety said about 50 billion yuan in funds earmarked for mine safety improvements over recent years had not been allocated.
Of the 1.95 billion tonnes of coal produced by China last year, only 1.2 billion tonnes were extracted under conditions that met national safety standards, the Beijing News cited the administration as saying.
The report follows the worst mining accident in China's recent history, where the toll rose to 214 with the discovery of another body.
One miner remains missing after the 14 February gas explosion at the Sunjiawan pit in Fuxin city, Liaoning province.
It was the third major Chinese mining accident with more than 100 fatalities in the last four months.
World's most dangerous
China has the most dangerous mines in the world with official figures recording more than 6000 miner deaths in accidents last year.
Independent estimates say the real figure could be as high as 20,000.
China's mines have been working far above capacity as coal prices have skyrocketed, while crucial parts of the country are facing power shortages exacerbated by 20 years of robust economic growth.
After the recent spate of accidents, the coal safety administration ordered that the 50 billion yuan be allocated for mine safety improvements over the next three years.
It said that the industry should be able to produce 1.75 billion tonnes of coal a year while meeting safety standards.