Amyas Morse, the NAO’s head, said he had qualified his opinion on the OLC’s 2013-14 accounts on the grounds of regularity. He stated this is in part owing to expenses paid to its chief executive, the former accounting officer of the body, which were not retrospectively approved by the Ministry of Justice (MoJ).

Publication of the latest set of OLC accounts was delayed from June 2014 to January 2015 after the NAO was alerted by an anonymous correspondent to concerns about the remuneration and expenses of Adam Sampson, the OLC’s legal ombudsman and chief executive.

The watchdog said these concerns had also been raised anonymously with the OLC, the legal services board and the MoJ.  As a result of NAO’s questions, the OLC and the ministry conducted a detailed review of the remuneration, expenses and benefit payments of senior staff since the OLC was created in 2009.

The NAO said this identified a number of payments which it considers to be ‘novel and contentious’ These included expenses totalling £20,752 paid to the chief executive which were for travel from home (in London) to work (in Birmingham), along with £1,580 of travel expenses and other expense claims that were not supported by sufficient evidence to confirm they were for legitimate business purposes.

The watchdog also raised concerns about the payment of an extra-contractual ‘total remuneration supplement’ of £348,109 paid  to the chief executive and other senior members of staff, and about payments of £874,940 made to the chief executive and all members of staff under a flexible benefits scheme. The OLC has since said that these payments may amount to ‘benefits in kind’ and is investigating how much tax should be paid on them.

Sampson has been suspended as chief executive since 19 November 2014. The MoJ determined that he was not a fit and proper person to continue to hold the position of accounting officer and he had his accounting officer delegation removed on 8 January 2015. The NAO said the failure to maintain a high standard of financial management in relation to his own expenses was a significant factor in this decision.

An independent review by City law firm Simmonds & Simmonds is believed to have found that Sampson acted with good intentions. In November Sampson said: ‘I have resigned because although it is clear from the independent report and all the scrutiny of my expenses claims that I have not been dishonest and my integrity is intact, an ombudsman must be a figure above controversy’.

In a statement, OLC chair Steve Green said it was ‘disappointing’ that the performance of the Legal Ombudsman had been overshadowed by the qualification of its accounts.

Green said: ‘This qualification was due to issues that largely relate to or derive from a failure to seek appropriate external approvals for some of the many decisions taken at the time that the Legal Ombudsman was being set up in 2010.’

The OLC is now reviewing all key financial processes and controls to ensure no other issues exist.