The Tory administration was attempting to save £14m
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Extra millions uncovered at Plymouth City Council are to be used to put the authority's accounts back in the black.
Miscalculations in the budget last year meant the authority did not realise it had an additional £3.5m.
Council leader Tudor Evans acknowledged the need for better budget monitoring.
But the discovery did not mean the council would be able reduce council tax or save services.
He said: "We have got to get into a period of stability on the budget to avoid violent swings of council tax for the time being.
"We have given that commitment to the government. It is part of the criticism that they made of the council in December."
'Normal practice'
The District Auditor is to investigate after the cash was missed as councillors and officers prepared financial reports under the former Tory administration earlier this year.
The administration was attempting to cut more than £14m from the £203m budget this year, and set a 14.75% rise in council tax.
Chief accountant Paul Williams said in a report: "It's perfectly normal practice for there to be variation from budgets at year end.
"From previous experience a figure of £1.5m to £2m would appear to be the norm.
"Clearly the £3.5m was a larger variation than we would have expected."