By Julian Whittle

Last updated 09:54, Saturday, 26 July 2008

Huge errors in Cumbria County Council’s accounts have been found by the Government’s Audit Commission.

Officers checking the figures have discovered that gross expenditure for 2007-8 was over estimated by £53m.

Income from fees and charges was £131m less than the accounts showed.

But income from Government grants was £78m more than the council thought.

Overall, the mistakes cancel each other out and officials said that no money has gone missing. But the errors are an embarrassment to the council, which is already rated as one of the weakest in England.

The mistakes mean that Cumbria has no chance of improving on its current two-star status when new ratings come out next year.

The council has issued a statement saying: “An error in classifying types in income has been picked up by the Audit Commission.

“In preparing the accounts, some internal recharges and Government grants have been classified as general income, which is incorrect.

“It is a technical accounting error in the way things are recorded – there is no suggestion of impropriety or missing money – the council’s overall financial position is unaffected and sound.”

This is the second year running that mistakes have been found in the accounts.

Senior officials have ordered an internal review.

And they have called in outside experts from the Chartered Institute of Public Finance and Accountancy to find out where their staff are going wrong.

The Audit Commission rates local authorities on scale from nought to four stars, where four is best.

Cumbria’s two-star award this February put it in the bottom 17 per cent.

Only two out of 150 county and unitary authorities were below Cumbria with one star.