Causeway Coast and Glens Council conducted an extraordinary audit of controversial land deals and found that there was a culture of "ignoring best practice and guidance in order to get land deals done".
The audit was conducted in November 2020.
After it was revealed that the council had granted a right-of-way in Portstewart for a hotel developer to build PS1 in March 2016, this decision was made.
The council stated that it would review the report and meet in August to discuss it.
According to the report, the council failed to show that it received the highest rate for ratepayers in land sales and rights-of-way transactions.
Colette Kane, auditor for local government, stated that some council officers' behavior was "not up to the standards expected of a public body".
The report also revealed that David Jackson, the chief executive of the council, was involved in two land deals where "a number significant failings were evident", which included the Portstewart case.
This transaction was reviewed and it was found that there had not been a professional valuation done prior to the grant of the right-of-way.
Report also included the sale of land to a charity to finance a hotel development at Castleroe Road in Coleraine in 2015 for PS5,000.
In both cases, the report revealed that senior council officers failed to show best price and that inadequate information was presented to councillors by them in order to allow them to make informed decisions.
According to the auditor of local government, she believed that both land transactions weren't "properly authorized" and that there was a case to prove they were not granted legally.
According to the report, the level of detail involvement of the chief executive in several cases was "unusual".
Ms Kane stated, "I have evidence that compliance with legislation and best practices in land and property issues was not part the culture of council."
"There was evidence that senior officers advocated actions that were against best practice.
"This led me to conclude that there was a culture of ignoring best practice and guidance in order to get land deals done'. This set the wrong tone at the top of the organization.
"In some cases, legal advice was ignored, and on one occasion, incorrect and unreliable information were provided to the auditor of the local government."
The report described how Portstewart's right of way was granted to a hotel operator to enable site access for a proposed hotel.
Ms Kane stated that senior council officers repeatedly mentioned the economic benefit of the borough in their responses as a justification for the decision taken.
She said that she did not believe these responses were sufficient to excuse any deviation from guidance and good practice.
The behavior of senior council officers was found to be "serious" by the local government auditor. He recommended that the council take appropriate action, including referral to relevant professional bodies.
The report found that some council officers' conduct was "well below expected standards". It also stated that there were "indicators of wilful misconduct", which were carefully considered.
It concluded that "the threshold was not sufficiently reached for any officer".
Local government auditor stated that Portstewart's case showed "little regard for getting a best price for council and ratepayers" as well as that potential marriage value/other special values to the purchaser "do not appear to have been considered".
In the Coleraine case, the report highlighted a conflict of interest in relation to David Jackson, the chief executive of the council.
Ms Kane stated that the buyer of the land appointed the chief executive of the Freedom of the City of London. He was awarded the title in August 2016.
After initial contact with him about the sale, but before the transaction was sealed, this transaction was completed.
The report stated that the council was aware of this fact and informed them.
Ms Kane stated that this and another conflict of interest related to the Coleraine sale's valuation "could and should have been avoided".
She added that they "served to further undermine both the integrity of the transaction being negociated and the wider integrity public services, creating an absence of trust."
BBC News NI reported that the chief executive of the council was "ultimately liable" for granting rights of way on public land in Portstewart to PS1.
North Antrim Assembly member Jim Allister brought the PS1 land transaction first to the attention the Audit Office in 2017. He said he was happy with the "robust findings".
When Mr Allister learned that the council had granted PS1 the right-of-way, he successfully challenged the council's decision not to grant planning permission for the Portstewart hotel complex.
He called the findings "truly shocking" but added that they were "well beyond what the chief executive officer and other senior officers can tolerate".
"The PS1 land deal to build a site for a hotel developer shows the disregard for ratepayers' rights and the lamentable inability of compliant councillors to oversee the situation.
"I appreciate the auditor's conviction that disregarding legal process renders this easement illegal." This challenge must be addressed by the council."
There are many other recommendations in the report, including:
A spokesperson for the council stated that Causeway Coast and Glens Borough Council acknowledged the publication of the exceptional audit report by Northern Ireland Audit Office.
"Time is required to assess the content and make recommendations and for council members to take the next steps.
"Work on the report began in late 2020 and council worked closely with the Northern Ireland Audit Office throughout.
"Council already made changes in its land and property procedures, and intends to adhere to its obligations to ratepayers.
"The council will discuss the report, its recommendations, and any further actions at the next full council meeting, Tuesday, 2 August 2022."
The DUP stated that the conduct of senior council officers fell short of expectations and that the public's confidence was "damaged".
Leanne Peacock, Sinn Fein councillor, said that the findings were "deeply disturbing and disgraceful", and called for action to implement the recommendations.
Margaret Anne McKillop, a member of the SDLP, stated that there was a lack of accountability at the council. The UUP however said that the council should ensure that "recommendations are properly dealt with".
Angela Mulholland, an independent councillor, stated that a "special council meeting should" be called sooner than expected to address the findings.
