Page last updated at 12:41 GMT, Wednesday, 24 June 2009 13:41 UK

Funding gap in Olympics accounts


Shortfall uncovered in 2012 funds

A routine check has uncovered a shortfall within the 2012 Olympics budget of between £60m to £100m.

KPMG auditors discovered the funding gap during a review of the Mayor of London's economic and business unit, the London Development Agency (LDA).

They found "additional spending commitments" regarding compensation for firms forced to move from the Olympic site in Stratford, east London.

An LDA spokesman said the funding gap could be absorbed through cost cutting.

"It won't have a massive impact on what we're trying to do," he said.

We're not pretending it's great news but it's not a fraud investigation and never has been
LDA spokesman

Two senior members of staff have been suspended from the Olympic Legacy Directorate (OLD), a department within the LDA, following the discovery.

The department is charged with compensating businesses forced off the formally industrial site, now being transformed into the centrepiece of the 2012 Olympic Games.

The accounting anomaly relates to a failure to put aside enough money.

But the LDA insisted there was no evidence of wrongdoing.

"We're not pretending it's great news," the LDA spokesman said.

"But it's not a fraud investigation and never has been.

"It came to light because of a review that we ourselves had carried out to change our procedures."

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