A committee of MPs investigating the government's welfare-to-work fraud detection has described checks as 'inadequate'.
The public accounts committee, which investigates government spending, has been looking in to accusations of fraud in A4e, although the company stated that a recent audit had found no evidence of fraud.
Labour MP Margaret Hodge, the committee's chairman, said that "risks remain, especially to value for taxpayers' money", with the Work Programme.
"The design of the programme still allows for the possibility of providers being paid for finding work for people who found the jobs on their own."
Ms Hodge said: "Where the government chooses to use private companies to deliver public services it is essential that proper arrangements are in place to prevent and detect fraud and malpractice.
"In this instance, the DWP's arrangements for overseeing and inspecting its contractors were so weak that vital evidence on potential fraud and improper practice was not picked up.
"The department failed, for example, to obtain from A4e damning internal audit reports produced in 2009 which pointed to instances of potential fraud and malpractice across the country."
The DWP "has said on the public record that it would terminate its commercial relationship with a provider if there was evidence of systemic fraud in either current or past contracts", Ms Hodge added.
"However, it has not yet provided a clear definition of what it means by 'systemic'."
A4e - the government's largest provider - is being investigated by police over allegations of fraud relating to its multi-million-pound welfare-to-work contracts, although the company has pointed out that an audit had cleared it of fraud.
Andrew Dutton, chief executive of A4e, said he was "confident" the firm was "a fit and proper company".
"We have gone back and strengthened our controls and ... we are now openly calling on MPs, business leaders and employers to come and see for themselves the work that we are doing."