Bungling council officials continued to pay a Birmingham foster carer for four years after she ceased to look after children - a mistake that wasted £37,000 of public money.

The recipient, who has not been identified by the city council, decided against pursuing a career as a carer after a brief trial period. But the woman's details remained on a computer system and payments were made into her bank account.

The mistake was highlighted as just one item in a multi-million pound list of financial mistakes presented to the council audit committee yesterday.

Other discrepancies disclosed in the half-yearly risk management report included:

* The loss of nearly £3,000 in cash by a member of staff on his return from collecting petty cash from the bank.

* The disappearance of £2,000 from the safe at a children's home after a member of staff left a key unattended.

The committee heard evidence of a range of fraudulent activities, including the suspected illegal use of 1,181 disabled parking badges issued in the names of people who have since died. It is believed the badges were kept and used by the families of the deceased instead of being handed back to the council.

An investigation also uncovered details of 22,000 people claiming single person council tax discount who are suspected of living with another person, while in a separate development 49 council employees resigned or were sacked after being investigated over allegations that they were illegal immigrants.

The council tax scam, where people claiming to be single can reduce their monthly bill by 25 per cent, is believed to cost the city £6 million a year.

A national fraud inquiry, involving other local authorities and public agencies, found evidence of a Birmingham City Council employee working for another authority while on long term sick leave from his employment in Birmingham.

A number of other workers were suspected of similar illegal practices, but auditors were unable to take action because of poor recordkeeping by city council managers.

Deputy council leader Paul Tilsley, who was behind the setting up of the audit committee, said: "I think we deserve credit for bringing these, and other internal cases, out into the open.

"In the past the result of the audit investigations would have been sunk without trace. Nobody would have known about them."

Jim Wilkinson, assistant director of audit risk management, admitted approval of single person council tax discounts was often based on "out of date information".

Mr Wilkinson said it would take a long time to process the 22,000 suspected fraudulent claims and admitted not all of the claimants acting illegally would be prosecuted.

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* The council corporate fraud team concluded 240 investigations in 2006/07 into corrupt practices valued at £3.3 million;

* During the first quarter of 2007/08, 34 investigations into fraud worth £1.2 million were under way;

* The council's own employees were found to be involved in 26 cases involving housing or council tax benefit fraud;

* However, there were only 90 successful prosecutions in 2006/07 and 132 in the year to date;

* Investigations into suspected benefit fraud during the first half of this year uncovered overpayments amounting to almost £2 million, with 2,320 separate inquiries taking place.