Auditor Larry Munroe’s 96-page report explains how a pervasive culture of “groupthink” and the city’s “overwhelming desire” to host concerts led to a series of bad decisions by officials.

Specifically, the report says that Halifax’s former chief administrative officer Wayne Anstey and Mayor Peter Kelly “should have known something out of the ordinary was occurring” and should have questioned whether making $400,000 in secret payments to the now-defunct Power Promotional Events was appropriate.

Both men “had access to information and the opportunity to raise concerns through a variety of policies and business practices,” the report says.

The payments were forwarded to PPE’s Harold MacKay in advance of a pair of concerts on the Halifax Commons in 2010 – The Black Eyed Peas on July 24 and Alan Jackson on Aug. 7. At the time, city councilors had threatened to cancel the shows over weak ticket sales.

The 2010 payments weren’t the only ones made to PPE, however. Over several years, payments ranging from “$300,000 to over $3,850,000” were made to the promoter before several concerts, and Munroe found “no documentation to show a reasonable level of due diligence was taken on behalf of [the city]” to confirm the promoter could actually cover the advances. Thus, when PPE went broke in October 2010, the city was left in the lurch for $359,550.

“There were sufficient ‘red flags’ raised early in the relationship to suggest [the city] should not have continued to advance cash against or on ticket sales,” Munroe wrote. “By doing so, [the city] effectively transitioned from a supplier of a venue to the financial backer of the concerts, risking taxpayers’ money.”

The report makes more than 50 recommendations to tighten up processes and notes that the practice of issuing cash advances may be in violation of the city charter.

An audit and finance committee will reportedly review Munroe’s findings before the matter is taken before council.