Auditors have found "weaknesses" in the contract between the government and Atos, the private firm paid to carry out fit-to-work medical assessments.
The contract underpins the Department for Work and Pensions's efforts to move people from sick benefits into work.
The National Audit Office said the DWP had failed to penalise Atos for "underperformance", and had not set "sufficiently challenging" targets.
Ministers said the terms of the contract were under "constant review".
French firm Atos was paid more than £112m in the last financial year to carry out about 738,000 face-to-face medical tests on benefit claimants.
Full story https://www.bbc.co.uk/news/uk-19244639
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Watchdog finds 'weaknesses' in sickness benefit system
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