Action is being taken to improve the financial situation

The Audit Commission reviewed the situation at Cleveland Police after a major funding deficit was found earlier this year.

It discovered the estimated budget gap is �7.3m.

The force and Police Authority are now working together to improve the financial situation.

The district auditor was asked to review the budget gap by the Police Authority, which has now made this report public.

The report found �2m of the �7.3m budget gap is the result of ongoing financial pressures common to most police authorities and �1m relates to growth.

The budget gap is not the result of any misappropriation of cash or a major breakdown of systems of internal financial control Audit Commission report

It said the remaining �4.3m is the direct result of weaknesses in financial management.

In its conclusion, the Audit Commission report said: "The current financial position is difficult but has been considerably exaggerated in the way it has been reported publicly.

"The budget gap is not the result of any misappropriation of cash or a major breakdown of systems of internal financial control.

"A culture of unbridled growth and too little regard for good financial management had developed within the Police Service.

"Until last year this culture had been largely unchallenged by the Police Authority."

It said the recent budget crisis had highlighted to the Police Service and the Police Authority the importance of addressing the need for good financial management and ending the growth culture that was the main cause of the financial situation and budget gap for 2004/2005.

It said the management team's of both were working together to take appropriate recovery action to improve the financial position and strengthen financial management arrangements.

A Cleveland Police spokeswoman said it would not comment on the report until it was discussed on Friday.