BEIJING (Reuters) - The auditing office of China's powerful People's Liberation Army (PLA) has come under the direct management of the Central Military Commission, state news agency Xinhua said on Thursday, in a series of military reforms to shore up supervision over the army.

The office was previously a part of the PLA General Logistics Department. Gu Junshan, the department's former deputy director, has been under investigation for corruption since he was sacked from the department in 2012, sources previously told Reuters.

Gu stands accused of selling hundreds of military positions and raking in millions of dollars from a position that gave him sway over appointments and development contracts for military-owned land, sources have told Reuters.

Reuters has not been able to reach Gu for comment and it is not clear whether he is being represented by a lawyer.

The reassignment of the auditing office, announced in a decree signed by Chinese President Xi Jinping, would give it "a more independent and authoritarian status as it is directly managed by the Central Military Commission (CMC), the country's top military decision-making and command organ", Xinhua said.

"This is a major decision made by Chairman Xi and the CMC in an effort to strengthen the army in the new situation and tighten auditing and supervision over military economic activities," Xinhua said, citing a statement released by the military. "It's also a key measure to deepen national defence and military reform as well as to push forward the innovation of the army's auditing system."

Xi is chairman of the Central Military Commission, which controls the 2.3 million-strong armed forces. He has made weeding out corruption in the military a top goal. Serving and retired Chinese military officers have said graft in the military is so pervasive that it could undermine China's ability to wage war.

Xi's campaign comes as he steps up efforts to modernise forces that are projecting power across the disputed waters of the East and South China Seas.

In late October, state media said one of China's most senior former military officers, Xu Caihou, had confessed to taking "massive" bribes in exchange for help in promotions, becoming the highest-ranking military official felled in Xi's anti-corruption campaign in the armed forces.

China stepped up a crackdown in the military in the late 1990s, banning the PLA from engaging in business. But the military has been involved in commercial dealings in recent years due to a lack of checks and balances, military analysts have said.