Orkney Islands Council has been criticised over its procedural process on importing 80,000 tonnes of stone from Oban – costing almost £1.5milion.
A review by the authority’s own internal auditors found significant breaches in council policy and protocol.
They stated that “orders were not raised in a published or open manner” and the procurement was “unsatisfactory”.
Local politicians hit out at the council’s handling of the purchase of stone.
The decision by the authority’s development and infrastructure committee to import the 80,000 tonnes of stone from Glensanda Quarry caused public uproar on the islands.
The overall cost, including shipping, was £1,444,000.
It said: “There has been reputational damage caused to the council, in particular by a lack of inclusiveness towards local businesses, which has caused understandable widespread concern and furore throughout the community.
Interim chief executive John Mundell said: “This is completely unacceptable and I will do everything possible to make sure this cannot happen again.
“This is a very serious matter and it is only right that I offer an apology to our community on behalf of the council.”
Five high priority recommendations were made by the audit team including that the council “must ensure that it has robust and effective monitoring of compliance with its financial regulations, contract standing orders and sustainable procurement policy”.
It added the council should review the setting of unlimited amounts for purchase orders.
Mr Mundell said: “I instructed the chief internal auditor to investigate compliance with our policies and procedures as soon as practicable after I became aware of the circumstances involved in the importation into Orkney of around 80,000 tonnes of stone.
“The report speaks for itself – serious mistakes have been made and these are highlighted in detail.
“The Council has robust purchasing procedures in place, but they were not followed or complied with on this occasion. I very much regret these circumstances.”
He added: “I have spent many years working in local government in Scotland and I believe there is much to be proud of in Orkney.
“I value this council’s workforce. Our staff our dedicated and loyal. But we are all human and all capable of making errors of judgement.
“It is how effectively matters are now handled that will prove the worth of the organisation moving forwards.”
Orkney MSP Liam McArthur said: “This audit report makes for sobering reading. Not only does it confirm the serious failings in the procurement process, it also justifies the anger felt within the local community.
“To restore public confidence, it’s vital the council now acts swiftly and decisively to address the failings identified.”
Highlands and Islands Scottish Conservative MSP Jamie Halcro Johnston said: “The report reveals a litany of shortcomings which, essentially, reveals a major failure in the governance of the project.
“It needs to be regarded as a wake-up call, and among the lessons learnt for the council must be the need for greater transparency and accountability, a much higher regard for the interests of the taxpayer, and a commitment to proving opportunities for local businesses.
“Frankly, alarm bells should have been going off much earlier, and we will need to see recommendations adopted that ensure no future project goes off the rails as badly as this one evidently has.”
The order was made to secure a supply of stone to supplement the remaining reserves at Cursiter Quarry, which are running low.
Many construction projects across Orkney depend on the aggregates and ‘tarmac’ that Cursiter provides and without a ready supply there is a real risk projects are delayed.
The council’s external auditors, Audit Scotland, are aware of the current situation.
