PENMAENMAWR town council has spent unsustainable amounts of money over the past three years according to a Wales Audit Office report.

But the council has subsequently strengthened its financial management and governance and is determined not to allow a similar situation to arise again in the future, the report states.

The Auditor in the report states: “The council’s overspending is rightly a matter of public concern. It has apologised for its management of public finances and accepts this is not in keeping with the high standards expected of a local council.

“I have found several failings in the council’s governance which I believe contributed to its poor financial management. These failings are equally attributable to current and former officers of the council and the councillors themselves.”

The report added: “The council’s budget setting and monitoring arrangements were ineffective and did not safeguard it from the over reliance on reserves.

“The council’s internal auditor escalated concerns about weaknesses in budget setting and monitoring but these went unheeded by the council. There was, in my view, enough opportunity for the council to take remedial action and introduce spending restraint early and prevent a financial crisis.

“The council’s arrangements to ensure appropriate declarations of interest are insufficiently transparent and diminish public confidence in its accountability. The council also needs to improve the consistency and transparency of its procurement arrangements.

The Auditor noted, from the council’s financial report for June 2019, that the council’s balances have been increased and stood at £52,196 as at the end of June 2019.

A spokesman for Penmaenmawr town council said: “The council welcomes the publication of the report and accepts the findings and acknowledges that during the period in question, its standards fell below those expected of a public body.

“Almost 12 months on from first publicising its difficulties the council is now in a financially stable position, with reserves that exceed those recommended by oversight organisations. This resulted in the Auditor concluding: ‘I am encouraged the council has since put in changes to address the weaknesses identified in my reports’.

“The financial problems discussed in the report were initially discovered through council’s own internal procedures, and it was the council who brought these matters into the public domain and reported them to the Welsh Audit Office.

“The council immediately took steps to rectify the issues, publishing a full report on its website in December 2018. By the spring of 2019, when the audit investigation began most of the recommendations contained in the Auditor’s report had already been implemented.

“This is recognised in the report, which emphasises ‘‘it is evident the council had recognised the seriousness of its financial position by the autumn of 2018 and had started taking action to improve its budgetary control and monitoring arrangements.’ This exercise was completed earlier this year.”