An investigation into Donnington Community Centre uncovered financial turmoil, failed council monitoring and a councillor's failure to register an interest.

David Taylor, Oxford City Council's monitoring officer, found that Labour's Bryan Keen, who had been splitting the £400-a-year rent for a room at the centre with Oxford East Labour Party, failed to record that in the council's register of members' interests.

He said that Mr Keen spoke and voted at a committee meeting where the centre was discussed but failed to declare an interest.

He also found that the city council failed to monitor the community centre's finances between December 1995 and December 1997.

And he found an absence of adequate financial controls at the centre.

His report details a series of loans to the centre, from the council and two breweries, since 1987 and a complete failure to provide properly audited accounts for two years. The total debt there is now £71,094.

Other incidents included the theft of £1,000 from the centre's funds by an office-holder at the end of 1995.

The centre's electricity was cut off in December 1997 and the city council had pay £259 to Southern Electric. At the time, the centre owed Abingdon's Morland Brewery £11,000 for drink, £7,000 to the Inland Revenue and Customs and Excise, and £2,200 to gas, water and electricity companies - as well as what was left of a £65,000 loan from Morland. The inquiry was launched two months ago after the Oxford Mail exclusively revealed the financial chaos and irregularities.

Liberal Democrats on the city council called today for Mr Keen to resign and backed Mr Taylor's recommendation that the council put more resources into monitoring its 23 community centres. Corinna Redman, Lib Dem leader, said: "Bryan Keen is criticised for failing to declare a pecuniary interest at a council committee meeting and for failing to register his interest in the upstairs room at the community centre in the Register of Members' Interests."We believe he should consider his position."

But Mr Keen told the Oxford Mail he did not declare an interest at the meeting because the discussion was about the centre's social committee - and he was paying rent to the separate community association.

He insisted that he did not speak or vote about the community centre.

He also said he did not need to declare the fact he was paying half the rent on the room because his interest was with an external organisation.

A council valuer concluded the room at the centre, used for storing office furniture for the Labour Party and printing election material, was worth £600 annual rent rather than the £400 Mr Keen and the Labour Party were paying.

Mr Taylor concluded: "I do not see this as a breach of Charity Commission guidelines but rather part of a wider failure to review systematically income from all sources." "I have found no evidence that Councillor Keen was running a private business. He did occasional printing and copying for the Labour Party at election time."

The Greens' Dr Mike Woodin said the affair highlighted the complacency of the city council and he called for urgent action to make sure such things did not happen in future.

Former Lord Mayor Bill Baker, who has sat on the centre's ruling community association since 1994, was cleared of responsibility for the cash chaos.

It was he who asked the council to carry out the last audit in November 1995.

Mr Baker said: "For the last 12 or 18 months the financial records at Donnington have been good but in the past they have been shambolic - it was the old back of the fag packet accounting."

He supported Mr Taylor's final recommendations, which were:

Make every community association fulfil the requirement to submit audited accounts every year.

Pay independent accountants to do routine audits every year of some or all community centres and carry out unannounced spot checks at centres which do not submit accounts or are in financial trouble.

Offer - and persuade the volunteers who run community centres to take up - training in book keeping and financial procedures.

The city council guaranteed a £65,000 loan from Morlands to the centre in 1992, due to end in April 2003. But it discovered at the beginning of last year that such guarantees could not legally be enforced and the council could not act as loan guarantor.

In March this year council officers recommended the centre's bar be shut to protect centre volunteers from becoming liable for the debt. It has been shut since, apart from a few prebooked functions, but the community association wants to reopen it.

On June 1, councillors rejected a plan which would have allowed the bar to reopen and are now setting up more meetings with the community association.

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.