Concerns about the council’s accounting and risk assessment procedures, in addition to its contracts tendering process, were raised by auditors BDO in its recently-completed review up to the year ending March 2016.
The council must now form an action plan to identify how it will address the failings identified by BDO.
The auditor reported: “The authority did not undertake a full risk assessment during the year.
"It cannot evidence that it has assessed and taken appropriate steps to manage all the risks it faces.
“Tenders were not sought in accordance with financial regulations, which state that three quotations must be obtained.
"This was not done, and the contracts were just presented for agreement by the council.
"The accounts were not certified and a notice of completion was not displayed by September 30 in accordance with the regulations.
"The authority was not registered with HMRC as an employer during the year and deductions have not been included in the accounting statements correctly.”
Town council mayor Raymond Gill declined to comment on the report until the full council has discussed its contents at its next meeting on March 2.
The council has been widely criticised since its formation in May 2015.
The Whitehaven News reported last month that its failed ice-rink scheme had cost the taxpayer over £34,000.
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here