A Bradford pensioner was paid £600,000 too much by mistake, and a report has called for a tightening up of the control of the scheme.
The Council was criticised in an annual report after the mistake by West Yorkshire Pension Fund, which it administers.
The annual Audit Commission inspection also criticised control of the £6.3 billion fund after it found a staff member wrote off £96,000 without authorisation.
At the Council's audit and staffing committee yesterday audit manager Colin Earl said the pensioner was overpaid when his reference number was inadvertently entered into his "to pay" column.
The £600,000 went into the recipient's current account and the pensioner did not receive interest.
Mr Earl said there was nothing wrong with the action taken on the £96,000 write-off in a VAT account but a supervisor should have been involved.
The fund chairman, Councillor Ian Greenwood (Lab, Little Horton), said the overpayment had been a clerical error and steps had been taken to ensure it could not happen again.
The Audit Commission also criticised the Council for having no code of conduct for officers or consistent procedure for declaring interests and gifts across the authority.
But district auditor Ivan McConnell said the Council had managed its finances effectively and the general preparation of accounts was satisfactory.Members were told improvements were needed in education, environment and culture, management of assets and sickness levels among staff.
And Mr McConnell said it was vital for the Council to get its new management structure in position quickly.
The Council's contribution to the regeneration of the city, crime reduction, social care for adults and housing were praised.
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