The Criminal Records Bureau has been roundly criticised in a report by the Parliamentary spending watchdog.
Someone suspected of smuggling drugs could easily pass CRB checks
The National Audit Office said the CRB - meant to check staff working with children - had huge delays and could not always do the necessary checks.
It blamed an over-ambitious timetable to set up the CRB, and "wrong assumptions" about how it would run.
Although things were improving, it said, the CRB was still not providing the service it had been set up for.
The Liverpool-based CRB could not even access information held by Customs or the British Transport Police, said the report.
So someone suspected by Customs of smuggling pornography or drugs, for example, could still get a job working with children.
The agency was also unable to access information on foreign applicants, or to check the
criminal history of Britons who have lived abroad.
The CRB came into operation in March 2002, and was planned as a "one-stop shop" to give employers details about an individual's convictions and cautions, as well as intelligence on them gathered by police.
But the service was beset from the start by problems and delays - hundreds of pupils had the start of their school term in September
2002 put back, for instance, because the CRB had failed to provide certificates
The report said that when the bureau was set up by the government, much of the planning had been based on "business assumptions" that turned out to be wrong.
The bureau had expected about 85% of employers would apply for checks on the phone or online for example - but 80% applied on paper, which takes much longer.
Problems were made worse by disagreements with Capita, the company contracted to run operations.
Capita has been fined a total of
£3.69m for failing to meet parts of their service agreement - but had been paid more than £23m up to January 2003, according to the report.
Even though fees for a check have been raised from £12 to either £28 or £33, the service will
not break even until 2005-2006, the report said.
That is a year later than expected and will cost taxpayers an extra £68m, it said.
The report said little was known about whether the service had reduced crimes against children and vulnerable adults anyway - and urged ministers to commission research on it.
The chairman of the Commons Public Accounts Committee, Conservative MP Edward Leigh said too little research was done for government IT projects.
"There was not enough spadework done," he told BBC Radio 4's Today programme.
"They imagined that the public would oblige by producing all these applications online but of course they produced them in large batches by post and the thing is chaotic.
"The people who suffer, of course, are not the civil servants, they are not the directors in Capita, they are the members of the public."
Home Office minister Hazel Blears agreed the
CRB's initial performance had been "unacceptable", but said it had since "transformed".
"Since June 2003 it has issued 93% of standard and enhanced disclosures
within two and four weeks respectively.
"It now processes over 50,000 disclosure applications per week, more than
twice as many as under the previous system," she said.