The report has focused on the homeless problem

It said the executive showed an "acute lack of social housing", and an especially high demand in Belfast and parts of the west meant three-year stays in bed and breakfast accommodation were "not uncommon".

In those areas, most executive and voluntary sector hostels were permanently occupied, and new homeless households had to stay in private sector accommodation while they "queue" for a hostel place.

In 2000-2001, 56% of Housing Executive homeless placements were made to that sector, compared with 35% in Scotland.

The auditor said the housing body did not know how much it spent annually on B&B accommodation, but estimated that in 1998-99 it was some �7.5m.

Rent paid by the Housing Executive for 87% of the private sector/B&B properties it used exceeded rent assessment levels set by the Valuation and Lands Agency, it said.

'Poor hygiene'

As it was restricted to the rent assessments, the housing body had to pay subsidy costs of approximately �1.23m in 1999-2000, said the report.

It added that Audit Office staff visited the most expensive of the private sector properties used and it "exhibited evidence of unsatisfactory standards, including poor hygiene and obvious health and safety risk."

There had also been numerous complaints from residents, including alleged drug use and dealing on the premises, it said.

The report said: "The Audit Office considers that the absence of proper plans has contributed to a shortfall in hostel capacity available to meet current demands."

The report recommended that a formal prevention strategy should form a key component of any action plans that it put in place following completion of its fundamental review of homelessness services.

That service was launched in May 2000 and issued for public consultation in September 20001.

Finalised

It also considered there was scope of the executive to "take more direct action to avoid homelessness in relatively straightforward cases".

The Housing Executive welcomed the Audit Office report and said its recommendations "reinforced the conclusions of its Fundamental Review of Homelessness".

It said the review would be finalised following the completion of an inquiry by the Stormont Social Development Committee into homelessness.

The executive said it would be inappropriate for it to comment further until the report was considered by the Public Accounts Committee.