A council decision to grant a right of way over public land to a hotel developer for £1 could be considered unlawful, an audit investigation has found.
Concerns over land deals by Causeway Coast and Glens Borough Council prompted a probe by the Audit Office which has found a catalogue of failings.
The damning report found the council failed to show it obtained best price in land disposals and granting rights of way.
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A culture existed of bypassing best practice to get "deals done" which set the "wrong tone from the top of the organisation", the local government auditor concluded.
There was evidence of "poor governance", legal advice being "ignored", and "inaccurate and unreliable" information was provided when the watchdog asked questions following a whistleblower complaint.
In one perceived conflict of interest, the purchaser of land nominated the council's chief executive for the Freedom of the City of London.
Councillors were also criticised for "inadequate challenge and oversight".
Two land deals of particular concern were highlighted in the report, which looked at property disposals and easements (rights of way) since the council was formed in 2015.
The first related to an easement granted for £1 in 2016 at Ballyreagh Road, Portstewart, to allow site access for a proposed £20million hotel. Planning permission was later quashed after a legal challenge.
The second was the sale of land in 2016 at Castleroe Road, Coleraine, for £5,000 to facilitate a developer in building a five-star boutique hotel.
In both cases the report found a failure to demonstrate best price was obtained; inadequate records; inadequate information for councillors to make informed decisions; and conduct of some senior council officers that fell "well short of expected standards".
Local government auditor Colette Kane concluded that in both "there is a case for finding the easement/disposal has not been granted lawfully".
Legislation allows a council to dispose of land at less than best price if approved by Stormont's Department for Communities, but since its creation Causeway Coast and Glens has never sought such permission.
The council's chief executive David Jackson was "directly involved" in both cases, the report said.
In an internal email about the Portstewart site, Mr Jackson said "let's turn this around really quickly" to another senior official, which led to it being added to a "priority list".
Mrs Kane also considered it "highly unusual" that the chief executive presented to the council an initial report on the Coleraine land sale.
The report highlighted two "perceived conflicts of interest" in the Coleraine case.
"It is clear the valuer was acting for the developer of the hotel and also valued the land on behalf of the council," the report said.
The purchaser also nominated the chief executive for the Freedom of the City of London, which he was awarded in 2016 after initial contact about the sale but before conclusion of the transaction.
Mrs Kane said these perceived conflicts "could have, and should have, been avoided".
"They served to further undermine the integrity of the transaction being negotiated and the wider integrity of public services, creating a lack of public trust," she said.
In 2017 the Audit Office had asked the council about the Portstewart site after the watchdog was contacted by TUV leader Jim Allister, who was treated as a whistleblower.
Mrs Kane said the responses provided were "inaccurate and unreliable" despite being agreed by several senior council officers.
She said this was "of particular concern as this resulted in me providing a conclusion to the whistleblower that appropriate action had been taken".
The extraordinary audit was ordered by former Communities Minister Caral Ni Chuilin in November 2020.
It has recommended an independent review of the council's governance arrangements overseen by the Department for Communities, which should consider "using its powers to intervene if necessary".
It also proposed "enhanced training" for councillors and that council officials should be referred to "relevant professional bodies as appropriate".
Mr Allister, who in 2019 won a legal challenge against the Portstewart hotel plans, described the "robust findings" of the Audit Office report as "truly shocking".
He added: "The £1 land deal to assemble a site for a hotel developer illustrates the cavalier disregard for the ratepayers' interests and the lamentable failure of oversight by compliant councillors.
"The senior officers, particularly the chief executive, so seriously found wanting should be considering their positions."
A spokesman for the council said time would be required to assess the report and consider the next steps.
He added: "Council has already made changes to its land and property procedures and intends to comply with its obligations to ratepayers and stakeholders.
"The council will meet to discuss the report, its recommendations and further action to be taken, at the next full council meeting."
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