The Home Office has won plaudits for improvements to its accounts since its 2004-5 figures had to be "disclaimed" by former Comptroller and Auditor General John Bourn because they were submitted too late to be properly audited.

It follows the recruitment of senior civil servants with professionally qualified accounting staff who have been deployed in key financial roles throughout the department's business units.

A Public Accounts Committee report says all of the department's finance directors hold a financial qualification, bar one who is in process of qualifying, and an internal group has been set up to look at each financial post to identify the qualifications it requires.

The report says: "This is a step in the right direction towards appointing the right people and as part of succession career planning across the Home Office."

It also praised as "encouraging" the effort invested by the department in developing competence in financial management amongst non-finance staff who have responsibility for managing resources and for project delivery.

The department admitted that it had had insufficient financial capability and in particular that the Office for Security and Counter Terrorism "lost sight of financial matters following a major terrorist incident shortly after it was set up."

Recruiting suitably qualified staff took too long and, as a short term measure, the department strengthened financial management by using central resources.

The Home Office is restarting a graduate training scheme to recruit and train future financial managers, with 16 starting this summer, and is keen to see other departments do the same so they do not poach its staff.

Public Accounts Committee Chairman Edward Leigh, in rare praise for a department's efforts, said: "The Home Office has come a long way since 2006 when its basic financial systems and processes were in disarray. Such has been its progress in improving its financial management that it is now being extolled by the Cabinet Office as a model of good progress in the Civil Service."

He warned it must do more to spread sound financial management throughout its ranks and keep up momentum, but added: "it was encouraging to take evidence on the positive steps they have taken in response to the constructive criticism offered by this committee some three years ago."