The NAO reports that Jenny Hall, third in charge at the NCC, had 'withheld essential information' about the property she was buying and 'misrepresented' facts, including the price of the house, when the NCC moved its offices from London to York.
The irregularity was recorded by the NAO in 1990 but never became public because it was not picked up by the Public Accounts Committee or MPs.
Most of the money was not recovered until Mrs Hall lost her job in October last year when the NCC merged with the School Examinations and Assessment Council. She repaid the council from her redundancy.
Reports which contain irregularities often remain unqualified because the sums involved are not considered 'material' in comparison to the organisation's total budget. They generally fail to attract the attention of MPs.
According to the NAO report, NCC staff were entitled to relocation expenses when the council moved from London to York. Mrs Hall, who lived in Peterborough was allowed to claim for a move to another property 20 miles down the road but still 140 miles from York. Although 'unusual', the council officers decided it fell within the rules.
The NCC's internal auditors said although they blamed the council for 'poor administration' they believed the case should be reported to the police.
Duncan Graham, NCC chairman and chief executive, decided against legal action when he was advised there was no case to answer.
He issued the formal written warning and Mrs Hall agreed to reimburse pounds 24,418 when the house was sold.
Mr Graham said this week he was 'horrified' when the matter came to light. He claimed it was not something he could have been expected to know about and that finance officers were disciplined over the issue.
Mrs Hall, now an independent consultant, refused to comment on the case. 'This was an internal NCC issue. There was never any formal legal case.'
A spokesman for the Department for Education said all its non-departmental government bodies were issued with financial guidelines and the fact that internal auditors picked up Mrs Hall's case supported their belief that current controls were sufficient.Reuse content