The Department for Communities and Local Government has been reprimanded by a Whitehall watchdog after running up an unauthorised overdraft of £217m.
Head of the National Audit Office (NAO) Amyas Morse announced that he was “qualifying” his regularity opinion of the department’s financial statements because of its breach of Treasury spending limits.
The finding is an embarrassment for Communities Secretary Eric Pickles, who has regularly lectured local councils on the need to get their finances under control.
Delivering his Commons statement on the spending review on Wednesday, Chancellor George Osborne praised Mr Pickles as “the model of lean government”.
But the NAO disclosed that the Treasury had imposed a £20,000 fine on his department as a punishment for poor financial management.
In a further setback, the NAO found that the department’s local government capital expenditure limit of £80,000 had been exceeded by almost £1.2 m as a result of overspending by its arm’s-length bodies, the Valuation Tribunal Service and the Commission of Local Administration in England.