Canada could be admitting people who are security threats or carrying serious diseases because its visa system is badly flawed, a parliamentary watchdog warned on Tuesday.

The report by the auditor general is likely to bolster U.S. critics who call for much tighter controls on the border with Canada on the grounds that Ottawa is letting in terror suspects and militants who could one day attack the United States.

Interim Auditor General John Wiersema said visa and security officials need to do a much better job of managing the health, safety and security risks of applicants.

In 2010, visa officers abroad processed applications for 1.04 million people seeking temporary residence and for 317,000 people seeking permanent residence. Canada has a population of 34.5 million and is one of the few western nations actively encouraging immigration.

Wiersema said officials at the two main departments involved - Citizenship and Immigration and the Border Services Agency - were overworked, ill-trained, poorly supervised and were using outdated methods.

Visa officers are responsible for deciding whether to grant or refuse a visa to enter Canada. The system lacks basic elements to ensure they get the right information to make those decisions, Wiersema said in a statement.

We've been reporting some of these problems with visas for 20 years, and I find it disturbing that fundamental weaknesses still exist.

The report comes at a sensitive time. President Barack Obama and Prime Minister Stephen Harper will meet in Washington next month to sign an agreement on closer co-operation on border security.

Ottawa was embarrassed in 1999 when U.S. officials arrested Algerian-born Ahmed Ressam as he crossed the border from Canada on a mission to blow up Los Angeles airport. Ressam had ignored a deportation order and used a faked birth certificate to gain a Canadian passport.

Some commentators in the United States have falsely claimed that members of the group behind the 9/11 suicide attacks entered from Canada.

Wiersema said two of the Border Services' manuals used to help officers screen for security risks had not been updated for several years and that one was last revised in 1999.

There has been no analysis to determine whether the current risk indicators to help identify potentially inadmissible applicants are appropriate or properly applied, he said.

Almost two-thirds of foreign-based visa officers interviewed by Wiersema's team reported problems validating information provided by applicants. This included police certificates of good behaviour.

In more than 80 percent of applications for permanent residence, not all the mandatory checks were carried out by Border Services Agency officials.

Wiersema also found potential immigrants were not being properly assessed to see if they were medically admissible. Officials focus on syphilis and tuberculosis even though the federal Public Health Agency has identified 56 diseases that need monitoring.

(Reporting by David Ljunggren; editing by Rob Wilson)