An IT project to streamline the UK Border Agency's immigration case work processes is one year behind schedule and £28 million over budget, according to a report from the National Audit Office.

The Immigration Case Work (ICW) programme has delivered some "important successes", the NAO found, but cost have overrun and expected savings have been downgraded.

"Loss of focus, poor governance and a tendency towards optimism bias in planning, delivery and reporting have contributed to the problems," the report said.

It said the programme board overseeing delivery "did not challenge IT contractors about their use of resources, necessary because the contract was on a 'time and materials basis". In 2008, the UK Border Agency awarded the system integration contract for the programme to IBM.

An absence of rigourous financial oversight "was compounded by optimistic reporting on the status of the programme's financial position", it added.

The UK Border Agency spends £1 billion each year processing immigration applications, and employs 10,000 staff to process those applications. Launched in 2008, the ICW programme was initially given a budget of £385 million, and was expected to deliver £139 million in annual savings by 2014.

However, by March of this year, it had already spent £252 million – 12% more than the expected £224 million. Cashable savings were just £12 million, half as much as the expected savings by that point.

The NAO found that the programme board for ICW introduced measures to improve financial control and project oversight. It has appointed a new 'senior responsible owner', whose responsibilities include ensuring "there is no optimism bias in reporting", and has reached new commercial agreements with suppliers,

Among the programme's successes was the introduction of a search engine called 'i-Search', that allows employees to find documents across the Agency's 12 legacy systems.