AN internal investigation by the country's jobs quango Scottish Enterprise has revealed that seven senior staff misused their corporate credit cards by withdrawing more than £10,000 for personal use.

One of the Scottish Enterprise employees took out £7500 in foreign currency when no overseas trips had taken place, and was subsequently referred for disciplinary proceedings. No police have been involved following the revelations.

Although SE tried to keep part of the report under wraps, officials mistakenly released the full document after failing to black out sensitive details properly.

The row began after an anonymous individual, allegedly from inside SE, made claims about staff expenses and the use of company credit cards. SE chief executive Lena Wilson ordered an inquiry into the allegations.

The Sunday Herald was last month given a copy of the audit after a freedom of information request, but with key details redacted, such as the names of the staff involved and the sums of money involved.

However, the black areas disappeared when the document was printed off, revealing everything, including the names of those who misused the credit cards.

However, the Sunday Herald has chosen not to publish the names, to keep to the spirit of the Freedom of Information Act and data protection laws.

Quango rules state that the credit cards must be used for "legitimate" business reasons, and under no circumstances can they be used to obtain a cash advance within the UK or for personal use.

Of the body's 1028 staff, around 156 have cards.

The report found that seven employees withdrew a total of £10,310 for "personal use", of which three examples were "significant" breaches of the credit card policy.

One staffer used her card to obtain foreign cash 13 times in one nine-month period, totalling £7500.

The withdrawals were for personal use and did not relate to foreign trips.

A second employee took out £1400 for personal use, while a third individual withdrew cash 10 times.

The audit stated that SE's human resources department was having "discussions" about taking "necessary action" against the staff.

It also noted that the breaches did not amount to fraud, as the staff are responsible for meeting the credit card balances.

A number of allegations about staff expenses were also investigated, but dismissed.

However, one "potential issue" was an employee who claimed mileage from a different address than was listed in her contract.

Examples of "high" hospitality costs relating to overseas visitors were also uncovered.

SE has now implemented a series of reforms to tighten its monitoring of credit card spending, including more frequent compliance checks.

Scottish Liberal Democrat leader Willie Rennie MSP said: "The controls on the use of credit cards seem to have been very lax. This discovery must lead to a tightening of procedures. It's good that the audit discovered these breaches, but it's concerning that the breaches occurred in the first place."

Conservative MSP Murdo Fraser said: "This clearly demonstrates that SE has been lax in its procedures for permitting the use of corporate credit cards on an unauthorised basis.

"There should be no repetition of these practices and the staff involved should be referred for disciplinary proceedings."

Iain Scott, Scottish Enterprise's chief financial officer, said: "Individual corporate credit card bills are paid for by staff personally. Staff are then reimbursed for legitimate business expenses with supporting receipts. At no point have we ever found fraudulent activity and our system also means there is no risk of financial loss to the public purse.

"We treat our data handling responsibilities extremely seriously and were shocked at this breach, which was as a result of human error. Lessons have been learned all round in this particular case."