Brown knew data loss was disaster waiting to happen

Weak procedures highlighted in 2004

The loss of the child benefit was a disaster waiting to happen and the Prime Minister was warned about inadequate data protection procedures years ago.

Prime Minister Gordon Brown was told three years ago that weak data protection procedures governing the child benefit database made fraud or mistakes more likely and, if they did happen, almost undetectable.

Obvious holes in working practises such as the ability of junior officials to download the whole database and the use of unencrypted discs were also highlighted.

Internal auditors examined procedures in March 2004. Their findings were written up by Treasury risk manager Richard Fennelly.

Fennelly wrote, according to the Press Association: "Fraudulent/malicious activity was not being detected... Live support staff had root access and could do anything without being detected with obvious risks."

He also warned that there was "no encryption between certain elements in the system".

The letter, obtained by The News of the World, made clear the very problems which led to the loss of 25 million individuals' records and calls into question government claims that the loss was the fault of human error by one junior official.

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