IT systems at the Department of Work and Pensions (DWP) have failed to stop the loss of £2.5bn through benefit fraud and error.
The DWP Resource Accounts Report 2006-2007 by the National Audit Office (NAO) says one reason for the high level of error is inadequate integration of IT systems.
The report does acknowledge the department's development of new technologies to combat fraud, including advanced data matching and comparing data from government and external sources.
The report said, "There are plans to further develop data matching using advanced IT systems which will allow more timely identification of fraud and error and, in particular, help to target organised fraud rings."
NAO head, John Bourn, said a debt manager IT system put in place in 2005 provides a "sound basis for the future" by helping to cleanse data and support the valuation of overpayment debts.
The other factors leading to errors were complex benefits rules, poor business process design and human mistakes.
Across the benefits schemes operated by DWP a total of £690m was lost to fraud, £1,010m to customer error, and £850m to official error. The sum is 2.1% of the total £128bn benefit expenditure.
The loss is down from the previous year's figure of £2.7bn, but it was still too high for the NAO watchdog to sign off the accounts - this is the 18th year in which it has refused to do so.
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