An internal investigation will take place to ensure that the significant concerns highlighted by an Audit Wales report into the relationship between Blaenau Gwent council and Silent Valley Waste Services Limited "will never ever happen again".
At a special meeting of Blaenau Gwent County Borough Council on Monday, February 7, councillors looked at the findings of the report and to agree a way forward from the controversy.
Silent Valley Waste Services Limited (Silent Valley), is a company owned and controlled by the authority.
The report is the fruit of a four-year investigation and delves back as far as the formation of the company more than 30 years ago.
Read more: You can find more stories about Blaenau Gwent here.
Wales auditor general, Adrian Crompton took councillors through the main points that his report raised and highlighted that that the council failed to establish robust and effective arrangements in its relationship with Silent Valley between 2003 and 2017.
Mr Crompton acknowledged the steps taken by the council since in 2017 to establish "much improved" governance and oversight arrangements and the leadership of the managing director Michelle Morris on this matter.
Labour group leader, Councillor Stephen Thomas said: "There can be no doubt that it contains the most unacceptable revelations of behaviour seen by this council, it's hard to see how it could get any worse.
"A member of the public described them to me as pigs with their snouts in the trough, and after reading this report those sentiments are inevitable and Blaenau Gwent's name will be dragged through the muck.
"We should reflect these officers were from the highest tiers of our organisation, chief executives and directors.
"It makes me uneasy to think we relied on these people to prepare reports for our consideration and take essential decision on behalf of the residents of this borough."
Cllr Thomas added that the Labour and Minority Independent groups both believed that there are "too many unanswered questions" coming from the report.
Cllr Thomas said: "We should satisfy ourselves that the culture and deficiencies found in the audit no longer persist."
"There's been no internal investigation and I believe if we're true about wanting to put these things right once and for all, we should do that."
The recommendation was seconded by Councillor Phil Edwards leader of the minority independent group.
Council leader, Councillor Nigel Daniels said: "It's disappointing to read what is undoubtedly the unpalatable content of the auditor general's report and I certainly offer no dispute or mitigation for anything that's contained in that.
"I agree with much that Cllr Thomas has said, it's highly disappointing particular the calibre of officers we were talking about and the trust and faith we put in them.
"It offers some comfort that the report recognises that since 2017 the council has taken action to address the deficiency in respect to Silent Valley."
Cllr Daniels added an extra part to the recommendation put forward by Cllr Thomas that: "appropriate council officers meet with audit Wales to jointly determine the approach and scope of that review and then it's reported back through the council's democratic processes."
Councillors voted to accept the report and authorise that Ms Morris now prepare a written response with Mr Crompton, this will be published in a local newspaper, as required under the Public Audit (Wales) Act.
The "significant concerns" that the council failed to do are:
Correctly approve pay and pension arrangements in respect of council officers appointed to the Silent Valley board;
Comply with procurement regulations in respect of services provided by Silent Valley;
Ensure that council appointments to the Silent Valley board complied with the council's constitution;
Establish proper governance and oversight arrangements in respect of Silent Valley from 2012 onwards to ensure accountability for the use of public resources;
Establish proper arrangements to manage potential conflicts of interest in respect of council officers appointed to Silent Valley's board, resulting in those officers being exposed to allegations that some of their actions were motivated by self-interest;
Ensure that decisions to make termination payments to Silent Valley directors were in accordance with the law;
Put in place competitive and robust arrangements for the recruitment of Silent Valley's new general manager, (the company's most senior officer) in 2016.
At the special council meeting, councillor Wayne Hodgins said: "This has been going on for a number of years under all administrations, Labour, Independent, whatever - way back.
"What's really concerning is that annually the Wales audit office, audit Blaenau Gwent.
"Over that period of time there wasn't any indications in reports that audit had gone into the teckal compliant company of the local authority, and I can't understand that.
"When there was a full, warts and all analysis of the authorities' actions by PricewaterhouseCoopers (PWC) there was no mention of it there either.
"I cannot understand how this has stayed under the radar until 2017."
Cllr Hodgins said that he could see Silent Valley were generating a profit but there was "no sign" of a dividend being paid back to the shareholder, Blaenau Gwent.
Cllr Hodgins said: "Why haven't the audit office picked this up many years ago?"
Mr Crompton said: "It's a perfectly understandable question."
"I am not the auditor of Silent Valley itself, they have their own external auditors."
Mr Crompton pointed out that he was the auditor for Blaenau Gwent and that the accounts of Silent Valley are "consolidated" into the councils.
Mr Crompton said: "With a turnover of around £1 million the financial significance is relatively small in the scheme of the authority's overall expenditure.
"My audit of the group accounts of the authority as whole, focus on the higher value areas.
"I guess that illustrates the fundamental point that flows from my report.
"Audit Wales and audit professionals generally should not be seen as the safeguard that protects any public body from this sort of action or behaviour.
"The internal oversight and governance and organisation puts in place is the first line of defence to ensure this sort of situation is avoided."
Mr Crompton explained that they were only brought in to investigate after a whistle-blower had brought the issues to the council's attention in August 2017
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