No evidence of financial wrongdoing, says Sandwell Council amid school transport contract row

But Sandwell Council said there were a "number of operational procedural areas identified for improvement" that "should be made alongside wider consideration of the choice of delivery model and type of tender process used".

The review was launched after an Express & Star investigation revealed four contracts worth more than £20 million over four years were set to be handed to companies run by Azeem Hafeez, a former council employee who was named in a 2016 report on land deals at the authority. He denied any wrongdoing.

The revelations led to questions being asked about the procurement process and accusations council officials were "looking after their mates".

West Bromwich East MP Nicola Richards raised the matter in Parliament, which was subsequently commented on by Leader of the House of Commons Jacob Rees-Mogg.

The council's cabinet had been asked to approve the contracts last month before new leader Rajbir Singh stepped in to defer the decision amid growing pressure. He promised an investigation into how the companies were chosen.

The council said the matter will also be examined independently "so that between the internal and external review all lessons can be learned".

No final decision has yet been taken to award the transport contracts for children with special educational needs for 2021-25, the authority added.

Councillor Singh, who took over as leader in May, has pledged to be "as transparent as possible" on the issue.

He said: “My decision to defer the matter was for the council to satisfy itself that the proper process was followed before cabinet makes its decision.

“The council’s Internal Audit Team, supported by other key senior officers from across the council, has conducted an initial review.

“Their preliminary findings are that while there is no initial evidence of financial wrongdoing or impropriety, there is a need to follow up on a number of operational procedural issues, including the model used for delivering the SEND passenger transport requirements and the use of the Dynamic Purchasing System as the tender process.

“To satisfy ourselves further and help bring the matter to a conclusion, the council is now in the process of commissioning an external body to also carry out a thorough, independent audit review which will be considered by the council’s Audit and Risk Assurance Committee.

“Members of our Budget and Scrutiny Management Board will also be examining the matter and considering the most effective delivery model for the provision of SEND passenger transport going forward.

“In order to be as transparent as possible, once the independent review has been concluded, we will be publishing as much of both the external and internal review that commercial confidentiality and the requirements of the Data Protection Act allow.

“I am a new leader and I am determined to ensure we are a forward-looking council. Under my leadership, we will always act in the public interest to provide the best possible services and ensure value for money for Sandwell residents. I believe the actions outlined above demonstrate this.”