House of Lords' expenses system open to abuse, report says

Key weaknesses are leaving the House of Lords' expenses system open to abuse, an internal report has warned.

Auditors said one peer was recorded as attending parliament on a sitting day - meaning they could have claimed £300 - despite having been abroad at the time.

They also pointed out there is no definition of the "appropriate parliamentary work" members must have carried out in order to receive the tax-free daily allowances.

The report, released following a freedom of information request by the Press Association, emerged amid calls for tighter controls and reform of the Upper House.

The internal audit team at the Lords randomly sampled 110 claims from the last financial year and found they all appeared valid.

They also offered "full assurance" about the way the finance department was policing the system.

The auditors added: "Although evidence indicates that the current level of control within the finance department is effective, the scheme itself continues to exhibit certain weaknesses which could potentially be exploited for personal gain."

One of the "key weaknesses" listed was around evidence requirements for claiming the £300 daily attendance.

"Members are required to certify that 'appropriate parliamentary work' was undertaken on the day(s) in question but there is no requirement to disclose the nature of this work at the time that the claim is made," the report said.

"While a recent review by the Lords Commissioner for Standards assessed the question of parliamentary work by reference to the amount of time spent on the parliamentary estate, it remains the case that no agreed definition of appropriate parliamentary work exists."

The audit team highlighted incidents when individuals had been wrongly marked down by staff as attending the House despite not yet having taken the oath, and in another case being abroad on the day in question.

Other peers had not claimed the allowance on days when they were entered on the database as attending.

"This could, of course, indicate that some members chose not to claim for all days attended; but it could equally indicate that the database itself, or more particularly the means of data capture, may be less reliable than had previously been assumed," the report said.

"One example where a member was actually out of the country on a day when she was marked as attending inclines us towards the latter view."

The team said mileage claims involved uncertainty as they "cannot be substantiated through supporting documentation".

"Finance department staff enter journey details supplied by the member onto a travel database and use this to verify subsequent claims," the document said.

"This approach is generally satisfactory but does not counter the risk of claims for journeys that were not undertaken."

The report, drawn up in June, went on: "Members who live outside Greater London can recover travel expenses for journeys undertaken by a spouse or civil partner between their registered address and Westminster.

"However, members are not required to provide evidence that the person for whom they are claiming is in fact their spouse or civil partner."

A House of Lords spokesman said: "An internal audit review tested the reliability of the system for members claiming financial support based on attendance at the House.

"The auditors reported that they could provide full assurance on the design and operation of the controls for the system.

"Some suggestions for improvements were put forward and are now being explored.

"This review found that, for all the payments tested, members were recorded as having attended the House as required and the quality of administrative control was good."