The fraud, uncovered by an internal team of auditors, related mainly to housing benefit and student grants.
But it also included false overtime claims, stealing of cheques and awarding of contracts.
Southwark defended its record saying the losses represented only £200,000 a year on an annual expenditure of £700m.
The district auditor had recently said Southwark had 'good practices' for eliminating and reducing benefit fraud, the council said.
'The council has also achieved a higher detection rate for this type of crime than the target recently set by the government,' it said.