Tower Hamlets council has said it is looking forward to demonstrating that council processes have been run appropriately after inspectors were appointed to investigate claims of financial mismanagement.
A Tower Hamlets spokesman said:
Government auditors are today meeting with senior officers of the council.
We welcome the opportunity to demonstrate that council processes have been run appropriately and to date we have seen no evidence to suggest otherwise.
This inspection affords the borough the best opportunity to demonstrate that the borough has acted in the best interests of all residents.
Eric Pickles has said he is taking steps to investigate alleged mismanagement of public funds in Tower Hamlets as a matter of public interest.
The Bangladeshi mayor of the borough Lutfur Rahman was accused by the BBC's Panorama programme of substantially increasing public funding to Bengali charities in return for electoral support.
Mr Rahman categorically denies the allegations and has accused the BBC of racism.
"It is a matter of public record that I have long been concerned about a worrying pattern of divisive community politics and alleged mismanagement of public money by the mayoral administration in Tower Hamlets," the Communities Secretary said.
"Following the receipt of a number of documents, I am now taking legal steps, in the public interest, to appoint inspectors to look into the allegations in respect of Tower Hamlets.