The government's Rural Payments Agency is still struggling to recover from the IT problems that affected the Single Payment Scheme to farmers in England.
The National Audit Office says The Rural Payments Agency "has made good progress, but still has more to do to resolve all the problems it experienced in administering the 2005 EU single-payment scheme".
The NAO said the agency succeeded in meeting the June 2007 deadline for paying claims under the 2006 scheme. However, the agency has not yet made up the difference to all those claimants who were paid too little in the first year, nor recovered the sums from those farmers who were paid too much, said the NAO report.
In the first year of the scheme, 2005, the agency had experienced considerable difficulties in capturing and processing the information about farmers' land areas, and failed to meet its own target dates and EU June deadline for making payments to farmers.
Financial hardship was the result for a significant minority of farmers and the chief executive of the agency at the time was removed from their post.