Call for extra scrutiny after Croydon NHS accounts error
Croydon Council and two other councils want a review into mismanagement at Croydon Primary Care Trust.
A report published last week found "substandard financial processes" led the trust to wrongly report a surplus of £5.5m for the fiscal year 2010/11, when it had a £22.7m deficit.
Croydon, Wandsworth and Richmond councils said they wanted to ensure "proper public accountability".
The NHS said there were now new, robust systems in place.
The independent report blamed the accounting error on a failure of financial management and control, poor quality management, limited scrutiny and a lack of leadership.
It cited the "additional complexity" of taking over the hosting of the London Specialised Commissioning Group (LSCG) - the body responsible for commissioning specialised services across the whole of London - and its £800m budget.
It also blamed a change in regional operational management when Croydon joined four other South West London PCTs.
The report noted that the "significant lack of audit trail" available means "the financial exposure facing NHS Croydon can only ever be estimated".
Sian Bates, NHS South West London chair, said: "New financial systems, processes and teams are already in place in Croydon - this will not be able to happen again."
NHS South West London said the error needed to be seen in the context of an overall budget responsibility of £1.4 billion in 2010/11, and that there had been no adverse effects on patient care.
But Croydon council leader Mike Fisher said the loss of control of finances was "completely unacceptable" and there was a question over public accountability.
The council wants a joint overview and scrutiny committee to be set up covering Croydon, Richmond, Merton, Kingston and Wandsworth - the South London Partnership area.
Councillor Lord True, leader of Richmond Council, said: "The NHS report describes a process that can only be described as a shambles yet has nothing to say about accountability.
"Croydon PCT was spending money it did not have - and some of it came from financially competent PCTs like Richmond, taking funds which were originally provided for the benefit of our communities."
An NHS spokeswoman said: "We note the councils' concerns and await further detail as to how they would like to proceed."