In a highly critical report, the House of Commons Public Accounts Committee said former director of the SFO Richard Alderman (pictured) showed a "disregard for the proper use of taxpayers' money" in agreeing severance packages worth around £1 million for three senior staff.
The report found Alderman provided the SFO's former CEO Phillipa Williamson with a contract specifying that her place of work was her home address in the Lake District, where she worked for two days a week.
The SFO paid her costs related to travel to London and hotels, which came to £100,000 between 2008 and 2012. There was also a payment of £400,000 to enhance her pension.
Richard Bacon MP of the Public Accounts Committee said for the CEO of such an important public body to be granted such arrangements is "quite astounding".
An investigation into the payments was ordered earlier this year by Alderman's successor David Green. It found the decision to make Willamson, chief operating officer Christian Bailes and technology head Ian McCall redundant were taken by the former director alone.
He did so without informing ministers and failed to get Cabinet Office approval for Williamson's severance agreement, the report said.
Total severance packages were £464,905 for Williamson, £437,167 for Bailes and £49,885 for McCall.
Alderman, who quit the SFO in 2011, is also criticised by MPs for failing to follow due process when signing off severance payments worth £15,000 to top executives.
The report said this was part of an attempt to avoid grievance action, despite legal advice suggesting this was not needed.
The committee said it welcomed a commitment from Green to strengthen governance at the organisation.
The SFO said it would consider the report and recommendations.
