Sir John Bourn, head of the National Audit Office (NAO), said past mistakes in assessments had left "a legacy of error" while mistakes still occurred in new cases.

He admitted that the system by which maintenance payments are calculated was extremely complex to administer and carried "a significant risk of inherent error".

But he said there was room for further significant improvements to be made before the Agency could perform "at a standard acceptable to both Parliament and clients".

In a White Paper earlier this month, the government pledged to simplify the assessment system, but most of the changes will not come in for at least two years.

Improvements

The CSA was set up in 1993 to assess and collect child maintenance from absent parents.

It has attracted much criticism, mainly because of the number of errors it has made.

Sir John said improvements had been made since a 1997/98 audit and accuracy was much better.

He singled out the introduction of the Decision Making and Appeals service which he said had helped streamline how maintenance assessments and appeals were processed.

And he added that the CSA had exceeded government targets for the accuracy of assessments while dealing with a 22% rise in cases.

But he said errors were still being made. These were far more likely to involve absent parents being asked to pay too much maintenance than too little.

Of payments received, some £23.8m was overpaid, compared to £6.2m which was underpaid.

Assessments for full maintenance contained overstatement errors of £79.4m and understatement errors of £53.4m.

Assessments for interim maintenance contained overstatement errors of £28.6m and understatement errors of £1.2m.

Changes

The CSA's annual report coincided with the NAO report.

It showed that more than a quarter of CSA staff left the agency in 1998/99, a 37% increase on the previous year.

Exit interviews showed the main reason for leaving was low pay.

Unions say low morale and excessive pressure has also been a problem.

Helpline services have been extended

Chief Executive Faith Boardman called for staff to be properly rewarded.

The report also states that £660m of maintenance was collected by the agency or arranged to be paid directly between parents in 1998/99.

Ms Boardman said customer complaints had reached "an all-time low" and improvements had been made in all areas.

These included more personal contact with parents, a better helpline service and extension of the agency's opening hours.

"We are pleased to say that our service delivery has improved, but we still suffer from the difficulties inherent in the current child support system," said Ms Boardman.