Corby Borough Council investigated over Kingswood development
An independent inquiry has been ordered into how Corby Borough Council handled its finances during the building of a new housing scheme.
The leader of the council, Tom Beattie, has set up an inquiry after a district auditor found errors in the financial management of the Kingswood scheme.
The council made some payments without seeing any invoices, says an audit report leaked to the BBC.
The report estimates the council made a loss of £1.1m on the project.
However, there is no suggestion that anything illegal has been done.
The district auditor has criticised the management of the project by the council.
The auditor found that while involved with the Kingswood development in Corby, the borough council paid £362,000 to a marketing company despite being unable to provide evidence for the service provided.
The leaked document shows the majority of the payments were invoiced at the beginning of the project in 2010, but there is no supporting evidence to support the costs.
Architects were overpaid £24,000 without invoices to support their claims, and the project manager had been billing an extended fee since April 2011.
The auditor found that two of the payments were approved despite the fact that they were unable to explain the reason for the fee.
'Unable to explain'
In the confidential document leaked to the BBC, the district auditor wrote: "In respect of construction costs, there is no evidence anyone at the council has been checking the amounts billed to the amounts on the architect's certificates."
He added: "Officers have been unable to explain why such a large proportion of the costs were paid up front or provide evidence that marketing services have actually been provided."
The auditor also described how financial projections drawn up by council officers failed to include the cost of providing the land to the scheme.
He acknowledged that the council officers had made attempts to claw back the money but had not been successful.
Councillors blame officers
Mr Beattie blamed the council's officers for failing to report the correct information about the costs behind the project, which led to the wrong decisions being made.
"I am concerned at what appears to be some management failures," he said.
However Chris Stanbra, the leader of the Liberal Democrats on the local authority, said that the council should take responsibility for the project as a whole.
He said: "The leader and the deputy leader are responsible for overseeing what officers do, and if they haven't overseen it properly then they also need to acknowledge their responsibility."