Housing files containing sensitive information have been lost, according to a damning report into Waltham Forest Council’s accounts.

Auditors also found how the password for an IT account with the highest access levels has never been changed, and is known by lower level staff and external providers.

This comes as internal auditors presented a report to the authority’s audit and governance committee last night.

They raised concerns and said if the problem is not fixed, it could breach data protection law.

It reviewed 46 elements of the council’s processes, including trading standards, care homes, homelessness and contract management.

They had “limited assurance” in 18 categories and “nil assurance” in one, the council’s housing management file management and data retention.

Auditors highlighted more than 280 recommendations, or “action priorities,” and 47 were of the highest priority level.

A number of recommendations that auditors made last year are also yet to be implemented by the council, including getting rid of the high access level IT account that external parties know the password for.

The report was written by the council’s head of internal audit and anti-fraud department based on the department’s work for the 2017-2018 financial year ending March 31 this year.

Addressing the council’s overall performance, Gemma Young, the report’s author and head of internal audit, said: “I acknowledge that the council has undergone significant change during recent years and whilst improvements to the risk management processes have been made throughout the authority, there is scope for further enhancements during 2018-19.

“In my opinion, reasonable assurance can be placed on the adequacy and effectiveness of the council’s internal control, the governance and the risk management arrangements for the areas reviewed during 2017-18, including schools.

“Where weaknesses have been identified, these have either been addressed or are in the process of being addressed by management.

“Throughout 2018-19, Internal Audit will carry out follow-up reviews to assess the progress being made by managers to address the priority one status weaknesses that were identified during their internal audits."

In the report, reasonable assurance is defined as: “While there is basically a sound system of control, there are weaknesses that put some of the system objectives at risk, and there is evidence that the level of non-compliance with some of the controls may put some of the system objectives at risk.”

A spokesman for Waltham Forest Council said: "The Waltham Forest Council Internal Audit Team provide objective assurance on all of the councils functions and services to ensure that residents get value for money and ensure proper administration of the organisations financial affairs.

"As in all complex organisations there are areas that require improvement but the overall assessment of both the Internal Audit Team and the independent external auditor’s is that Waltham Forest Council is run effectively and efficiently.

"The results of these audits are published on our website as we are committed to openness and transparency."

To view the auditors' full report, click here.