UK Border Agency (UKBA) staff dealt with a backlog of immigration cases so inefficiently that at one point 100,000 items of post were unopened, says a report.
Chief Inspector of Borders and Immigration John Vine found security checks were not carried out properly on old cases and that workers had failed to look at the records of other government departments.
Applications were placed into an archive of unresolved cases after "very minimal work", despite the agency assuring MPs that "exhaustive" checks had been carried out, he concluded.
Mr Vine said: "An examination of controlled archive cases showed that the security checks - which the agency stated were being done on these cases – had not been undertaken routinely or consistently since April 2011.
"I also found that no thorough comparison of data from controlled archive cases was undertaken with other Government departments or financial institutions in order to trace applicants until April 2012.
"This was unacceptable and at odds with the assurances given to the Home Affairs Select Committee that 124,000 cases were only archived after 'exhaustive checks' to trace the applicant had been made".
Mr Vinee was asked to evaluate how well UKBA had handled the backlog of thousands of unresolved immigration cases.
In March 2011, there were 147,000 unfinished cases that were passed to an audit unit tasked with dealing with the backlog.
Mr Vine said he believed little had been done to try to resolve the cases before they were passed over.
Chief Inspector John Vine was highly critical in the report He said that at one point more than 150 boxes of post, including letters from applicants, MPs and lawyers, lay unopened.
Some asylum seekers who had no grounds to stay in the UK accrued the right to remain in the country because they were waiting so long for their cases to be resolved.
"Through the inefficiency and delay of the agency, those who would otherwise have faced removal will have accrued rights to remain in the UK," Mr Vine said.
He also criticised "poor" customer service and said that a lack of resources meant that deadlines were often missed, even when legal action was threatened.
In a sample of 135 files examined as part of the inspection, each case had lain dormant for an average of 87 months - more than seven years - before they were reopened in 2010 for consideration.
The shortest period of inactivity was six months - the longest was an astonishing 17 years and nine months.
A total of 115 cases were found to have entered the UK illegally, and there were only 10 cases where active efforts had been made to trace absconders.
Only 34 applicants had been recorded as absconders on the police national computer.
The Chief Inspector made a series of recommendations to UKBA, including routine checks against police records and making a public commitment to resolve the backlog within a fixed timeframe.
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