Capita has rejected the findings of a report into a £2 million fraud against Barnet Council that criticised the firm’s financial safeguards.

The outsourcing giant went on the attack in a statement published in early December, branding the conclusions of the report – which was carried out by consultancy Grant Thornton – “highly caveated and limited”.

Published in September, Grant Thornton’s report identified financial control weaknesses across the council’s two main partnership deals with Capita – Customer Support Group (CSG) and Regional Enterprise (Re), which covers development and regulatory services (DRS).

These weaknesses allowed former Capita contractor Trishul Shah to defraud the council of just over £2 million over several months.

Mr Shah was only caught when his own bank sounded the alarm over suspicious payments.

Following the report’s publication, Barnet’s Labour leader Councillor Barry Rawlings called on the council’s leader and deputy leader to resign.

Capita’s statement says: “The report’s conclusions regarding financial controls across the council and Capita’s CSG and DRS contracts have not been independently verified, are not underpinned by clear evidence, and in many instances seem to be based on opinion and hearsay.”

Barnet Council has since announced that at least two services – finance and strategic human resources – are to be brought back under its own control.

It has also recovered the £2 million and negotiated a £4.12 million compensation deal with Capita to cover the costs of dealing with the fraud and other contractual problems.

Capita admitted there had been “failings” in some areas of its contracts.

The firm’s statement adds: “Capita accepts that this case highlighted failings, which we have worked in partnership with the council to overcome.

“All the actions raised as a result have already been delivered by Capita and are in the process of being audited.

“We are committed to continue working with the London Borough of Barnet to deliver all of the activities in its rectification plans to achieve improved financial controls across Re, CSG and the council.”

The council has launched a consultation giving members of the public the chance to air their views on the Capita contracts.