A council may have acted unlawfully in the way it sold a piece of land to a developer, the Audit Commission says.
Uttoxeter Town Council did not do enough to market the land, a possible higher offer was not pursued and sufficient legal advice was not taken, the report said.
The 2009 sale centred on land at the rear of the Town Hall in the town which was eventually sold for £125,000.
A council spokesman said he did not agree with the findings.
The report criticised the "poor underlying governance framework within the council" and raised concerns about the "clarity of roles of councillors, the clerk and other staff".
The lateness of circulating agendas and background papers to councillors was also highlighted.
But the Commission said it was not going to seek a declaration from the court that the sale was contrary to law.
It said that was because the cost of taking action would be disproportionate to the sums of money involved and it would have little practical effect in relation to the sale.
Mayor David Brooks (Con), said: "As for not doing enough to market the land, there was only ever one interested party and they approached us.
"It's not true that there was at least one higher potential offer that was not pursued.
"The only (other) potential offer was from a member of the council and it was a deliberate ploy to stall the development."
Mr Brooks insisted the authority had taken sufficient legal advice.
"The thing is, there have been allegations made and they (Audit Commission) are duty bound to investigate," he added.
He said the land remained undeveloped.