The Department for Communities and Local Government (DCLG) has hit back at claims of  ‘poor financial management' by leading MPs.

A spokesman for the DCLG said the department has an ‘excellent track record for saving money' following a report by the National Audit Office, which claims it overspent its budget for 2012/13.

According to the report, the DCLG managed to spend £29,097m in 2012-13, against a limit of £28,971m – meaning the department ended up £217m overdrawn.

The DCLG spokesman said: ‘An administrative error by officials meant the department went overdrawn for one banking night at the end of the financial year, but immediate action was taken to correct it and avoid any recurrence.

‘This government has stopped excessive and wasteful spending in the department, delivering the largest savings in Whitehall, with administration spending down by more than 40% and the move to Marsham Street next year, saving the taxpayer £9m per year.'

The chair of the public accounts committee, Margaret Hodge, said the report highlighted two separate instances of ‘poor financial management'.

‘The Department also went over its capital limit for local government spending,' said Ms Hodge. ‘Against a limit of £80,000, two arms length bodies, the Valuation Tribunal Service and the Commission of Local Administration in England (Local Government Ombudsman) spent a a total of £1.21m.

‘If local authorities, for whom the Department is responsible, acted in this way, the Department would be down on them like a ton of bricks. The DCLG must learn lessons and ensure it does not repeat these mistakes.'

A Local Government Ombudsman spokesman said: ‘We operate a robust and effective system of financial controls to ensure that we spend public money wisely. It is due to these controls that, as in previous years, our accounts were approved without qualification by the independent National Audit Office.'