MP JONATHAN Edwards has accused Carmarthenshire County Council of "dragging the good name of Carmarthenshire through the mud" as the local authority's dispute with the Wales Audit Office appeared to be heading for the High Court.
Assistant auditor general Anthony Barrett has issued two public interest reports stating that two transactions relating to Chief Executive Mark James were unlawful.
The items in question are the granting of a £23,217 indemnity to pay Mr James's costs in his libel case and counter claim against blogger Jacqui Thompson, plus £16,353 paid in lieu of pension contributions.
The pension arrangements have since been reversed, but in a defiant statement last night the council said they remain convinced that the legal advice they had received – that the council has the power to grant such an indemnity – was correct.
"Although the Wales Audit Office has expressed an ‘opinion’, that opinion does not in itself determine that the council’s actions were unlawful," ran the statement.
"We have been completely open and consulted the Wales Audit Office at the outset, prior to granting the indemnity, and they did not advise against the action we took.
"Some months after the indemnity had been granted, the Wales Audit Office further confirmed to a member of the public who queried the decision that they felt the council’s action was lawful.
"Clearly they have now changed their minds, some considerable time after the decision was taken, and too late for us to turn back the clock.
"We remain firmly of the belief that we acted legally and properly as a caring employer should."
Saying he feared the local authority was on course for a High Court hearing potentially costing "thousands of pounds", Mr Edwards said Carmarthenshire residents would be "disgusted" by the council's "total disregard" for the audit process.
“The council leadership has history in challenging the findings in independent reports of the Ombudsman, and it is now happy to do the same with reports of the independent Auditor," he said.
“The council leadership has undermined the integrity of the Wales Audit Office as an institution and is dragging the good name of Carmarthenshire through the mud.
“The Auditor is quite clear – accept his report or end up in the High Court. If the council forces this to the High Court then the Chief Executive and the Leader of the Council should fund any costs out of their own pockets.”
Meanwhile, the WAO have said Mr Barrett stood by the conclusions in his reports.
"Regarding the issue of the pay supplement in lieu of employer's pension contributions, the process was significantly flawed, thereby rendering the policy unlawful," they said in a statement. "In particular, the council have not demonstrated proper exercise of discretion in setting ‘reasonable remuneration’, he stated.
"In relation to the granting of an indemnity to the Chief Executive, the Appointed Auditor firmly remains of the view that the decision was unlawful.
"If the Council does not accept this view, the Appointed Auditor may apply to the courts for a declaration that the item of account is contrary to law."
And, responding to the council's claims that they had 'changed their minds' over the indemnity, the WAO added: "When the council took the decision to grant an indemnity to its Chief Executive in January 2012, we advised the council to take their own legal advice on this particular issue, which they did not do.
"Instead, they referred to general legal advice dating back to 2008.
"In August 2012, some four months after the council had already started paying legal costs, the Appointed Auditor provided a response to a member of the public, in which he referred to the general legal advice that the council had obtained.
"The Appointed Auditor obtained his own legal advice in September 2013 and provided this in full to the Council."