A public interest report by the controller of audit, published yesterday, finds that the former Gordon DC failed to comply with basic procedures over its financial involvement in the project.
Mr Kynoch said: 'I am very grateful that the controller of audit has published this public interest report. It is evidence of the essential role that the Accounts Commission can play in ensuring that local authorities do not waste money.
'I am alarmed to learn from the report that Gordon District Council failed to comply with basic procedures relating to its financial involvement with the Archaeolink project. The controller of audit's report points out a number of shortcomings by the council in deciding to commit funds to the project and fundamental procedures which were not followed.
'There is a lesson here for all councils. The Accounts Commission has issued clear guidance about councils' responsibility for the stewardship of public funds both generally, and in relation to arms length trusts and companies in particular; I expect councils to heed it.'
The Archaeolink project was conceived by Gordon DC in 1989 to create an archaeological visitors centre as a focal point for exploration of archaeological sites in the area. The Archaeolink Trust was established in 1993 to manage the project.
The organisations which have committed capital funding to the Archaeolink Trust are Gordon DC (£0.6m), Grampian Enterprise (£0.6m), Grampian RC (£300,000 loan, £50,000 grant) and the European Commission (£2m).