Cheshire East Council is to appoint an independent investigator to look into alleged financial and legal irregularities regarding procurement of a waste facility at the Lyme Green depot in Macclesfield.
The council had been planning to build a new waste facility at the site in Macclesfield but stopped the project at the end of November 2011. An internal audit found evidence that officers failed to comply with rules to prevent financial and legal irregularities.
The audit committee said in its 97-page report published last week that construction work started on site before the necessary planning permissions had been secured, an issue about which the council's own planning officers complained.
The council also broke rules around EU regulations for procurement by not offering for tender contracts over a certain value, the auditors claimed, leaving the council open to legal challenge from firms who may have wished to bid for work. The audit report stated: "Expenditure beyond the approved budget on the scheme was incurred and finance and contract procedure rules were broken. Officer delegations were exceeded".
Cllr Michael Jones, leader of the council, has sent all members of the staffing committee the CVs of four independent candidates to instigate investigations into staff behaviour.
Jones also issued instructions that in the absence of the chief executive, who remains off work ill, the terms of reference will be set by the full cross-party staffing committee and that those terms of reference will be published.
"The investigator, once appointed will be encouraged to meet with all the staff mentioned in the report, Members, Cabinet Members and their support Members and any other appropriate witness," said Cllr Jones.
The decisions were taken at an extraordinary informal Cabinet meeting, convened to respond to the recommendations made by the Audit and Governance Committee.
Cllr Jones continued: "This issue is so important to me and the Members of my Cabinet, I felt it was essential that actions must be taken and made public with the utmost urgency. This issue is too important and I feel it is necessary to move things along as quickly as possible. It is inconceivable to me that any member of the Council will question this line of action but it is necessary that everything we do regarding Lyme Green is open and transparent.
"The Council's reputation is being seriously undermined and I want to assure every resident that the fullest independent investigation will take place to review the conduct of staff mentioned in the report into Lyme Green.
"Many changes have already been introduced to prevent any reoccurrence of such a failure of the processes of the Council. However, it is only after the independent investigation has been concluded that the Council will be in a position to address some of the potential cultural and constitutional changes that I, and I am sure, other Members envisage being necessary.
"The draft recommendation reads: 'The Council, in accordance with its staffing policies, instigate an immediate independent review of the conduct of staff mentioned in the report and consider whether there is a case for appropriate disciplinary or other action to be pursued, the review to include consideration of whether the public or any Members were misled and an examination of the nature of the Council's communication with the public'.
"I wish to applaud all the members of the Audit and Governance Committee, in particular the chairman, John Hammond, and the officers involved in putting the report together, for the thoroughness and impartiality they showed in examining the details surrounding the events concerning Lyme Green.
"It was essential that this report was discussed fully, in public, so that every resident, especially those who live near the Lyme Green site, could be assured nothing was being hidden. The only way we can now deal with this regrettable position is by showing openness at every stage."