DETECTIVES have launched an investigation into allegations of financial irregularities at Hyndburn Council in connection with the refurbishment of a fire-damaged building.
Accrington CID is examining whether funds claimed from an insurance company after a fire at the Coach House, in Oakhill Park in 2004, can be properly accounted for.
But the council says it has already investigated the case and there in no evidence of any wrongdoing.
The allegations have been made by Hyndburn Council opposition leader Graham Jones and Friends of Oakhill Park member Tony Hindley.
The Labour councillor said: "Ex-councillor Tony Hindley came to me with serious concerns that indeed worried me to. I used my councillor privileges to arrange a meeting between the council’s chief executive and Tony. Together they decided that a police investigation was needed.
"I am pleased the police have finally been called in and I hope they will be able to get to the bottom of the matter."
The council has launched three internal investigations into the Coach House refurbishment after it received complaints over the standard of the refurbishment and the building no longer being fit for purpose.
The internal investigations did find problems with the quality of work being carried out, but it found no evidence of fraud.
Council leader councillor Peter Britcliffe accused Graham Jones of bringing the council into disrepute.
He said: "Councillor Jones knows that the internal investigation has looked into these matters. The truth is that an error was made and as soon as this was realised, we wrote to the loss adjuster to put matters right."
Council portfolio holder for finance and asset management, Councillor Marlene Haworth added: "This whole thing is being blown out of all proportion. No-one that has looked at this has found anything other than a simple case of human error.
"We are very happy for our investigation to be reviewed as we’re confident that this will confirm our findings that there was a mistake."
Detective Sergeant Mark Gillibrand, of Accrington CID said: "The investigation is at a very early stage. The council has been fully co-operative with our inquiries."
