Anti-fraud defences still have not been put in place half a year after details of a £2m theft from the council came to light.

An investigation was called for by Labour’s audit spokesperson Cllr Alison Moore after it was revealed payment checks had not been reviewed six months after a report into a £2 million fraud against the council was published – despite being listed as a “high priority”.

The checks were one of the recommendations made by consultancy Grant Thornton to tighten Barnet Council’s financial controls following the fraud by a former Capita contractor.

Cllr Moore said: “There must be an investigation into how this was allowed to happen.

“We are six months on from the publication of the report, and our last update said this action had been submitted and verified for testing. It is completely unacceptable.”

Capita says the recommendation was “temporarily delayed”, and Barnet Council is working with the company to ensure it is implemented as soon as possible.

Grant Thornton’s report advised the council to review the automated payment process for new suppliers and propose improvements to the system.

But last week’s audit committee report revealed the recommendation had not been put in place “due to no assurance having yet been obtained over the operating effectiveness of the associated controls in place”.

Of the nine other high priority recommendations, eight had been implemented and one had been partially implemented.

The Grant Thornton report into the £2 million fraud by former Capita contractor Trishul Shah showed five financial safety nets designed to protect Barnet Council had failed.

Mr Shah was jailed for five years after pleading guilty to two counts of fraud by abuse of position during a hearing at Harrow Crown Court on July 31 last year.

He made 62 fraudulent payments relating to compulsory purchase orders between July 2016 and December 2017, while he was employed on a regional enterprise (Re) contract with Capita.

The council subsequently decided to bring two services that were outsourced to Capita back in house and agreed a £4.12 million compensation deal with the firm.

A Barnet Council spokesman said: “Action has been taken to implement this recommendation, but the council is not yet able to verify that the new process is working effectively.

“We are working with Capita to ensure that the implementation of this recommendation is completed and verified as quickly as possible.”

A Capita spokesperson said: “We temporarily delayed the implementation of one of the Grant Thornton recommendations because it could have delayed payments to our new suppliers, including SMEs (small and medium-sized enterprises) which rely on prompt payment.

“We have now implemented this recommendation and are working with the council to review and amend the process where necessary to ensure it maintains the integrity of financial controls but minimises any negative impact on suppliers.”