Concerns over spending by the UK's state-funded broadcaster the BBC have been largely laid to rest following an accountancy firm probe.

The investigation, ordered by chairman Michael Grade earlier this year, gives the BBC a broadly clean bill of health and finds financial controls at the corporation are consistent with its public service values.

However, accountants Ernst & Young recommend improvements in the scrutiny of discretionary expenditure - including travel, accommodation, expenses, restaurants and catering and location - coupled with greater transparency in other areas. They also recommend monthly financial reports on production expenditure.

Says Grade: "As part of our new governance arrangements, the governors are committed to strengthening our methods for monitoring the BBC's financial performance and this will include commissioning ad hoc reviews of this type."

The BBC's director general Mark Thompson will now study the recommendations and report back to the BBC regulators, its board of governors, in December.

The governors are also awaiting the results of Thompson's four strategic reviews of BBC operation, which could include job losses, mass relocation and the sale of certain non-core assets.

Data sourced from Financial Times Online; additional content by WARC staff