Separate departmental inquiries have been ordered against the guilty officials, Minister for Rural Development and Panchayat Raj Jagadish Shettar told reporters here.
13 officials, including an Executive Engineer attached to the Minor Irrigation Department in Zilla Panchayat of Yadgir district, were suspended on charges of misusing Rs 2.50 crore.
The government had allocated the amount for taking up desilting work of 50 tanks, but the officials awarded piece works without calling for tenders, he said.
11 other officials face similar action for misappropriating Rs 1.73 crore, released for procuring materials to hostels by Chamarajanagar Zilla Panchayat, he said.
None of the works were completed while the officials had made payment for them, the minister said, adding that the inquiry against them would be completed in about three months.
Criminal cases would be filed against those found guilty and steps for recovery of the misused funds will be initiated, he added.