THE Audit Commission has raised concerns with City of York Council over its handling of the controversial Derwenthorpe development.

Chief Executive David Atkinson, pictured, has been asked by the district auditor to come up by the end of this month with proposals to improve the authority's "control framework."

The council says these controls relate essentially to three issues:

Ensuring that officers provide full information to members

Demonstrating best value

Putting important partnership arrangements on a formal footing.

However, the district auditor, Mark Kirkham, has told the authority he does not feel it necessary to exercise his "statutory audit powers."

A complaint was lodged with the commission earlier this year by Ryedale MP John Greenway on behalf of a constituent, Mark Warters, a leading opponent of the Joseph Rowntree Foundation's (JRF) proposals for a 540-home model village on York's eastern outskirts.

Mr Warters had suggested that the council's decision to select the JRF to develop the site did not represent best value for money for council taxpayers.

The district auditor, Mark Kirkham, has now told the MP he has sent a detailed report of matters arising from the audit to the chief executive, highlighting specific opportunities to improve the council's control framework.

"I have asked the chief executive to respond to me by the end of November, describing the arrangements which are now in place, or what actions he intends to take, to improve the overall controls," he said, adding that when he had received a satisfactory response and consent, he would release the report.

Mr Greenway told the Evening Press: "Whilst I have no detail of which controls have been found wanting, clearly all was not as it should have been and the Audit Commission's decision should be made public."

He said his concern was to ensure that the rights of council taxpayers were protected. He said a fund had been set aside by the council to compensate the foundation if planning consent is not granted, and it had been selected as a partner in the knowledge that the sum obtained for land was less than might have been realised with an open tender.

A council spokeswoman said today it would "respond constructively" to points raised by the Audit Commission, and welcomed its advice, "as well as its acknowledgement that it is based on current guidance and best practice that was not available at the start of the project.

"In the meantime, we are glad to note that we have demonstrated that we have not acted unlawfully or unreasonably, that community views 'were effectively fed into' the design selection process and that we have set out a strong case for entering into a partnership with the Joseph Rowntree Foundation without a competitive selection process."

Updated: 10:01 Friday, November 04, 2005