Councillors in Rhondda Cynon Taf are facing calls for resignation after spending the money on a house in Penrhiwceiber, Cynon Valley.

The authority has faced legal action over the move.

A report by the auditor has also revealed that administration problems mean the council could lose out on millions of pounds of grants.

The council initially paid out a grant for renovation work to one of two families who live in the semi-detached property.

Grants

However, the total bill soared after serious flooding and safety problems developed, affecting both homes within the property.

One family had to move out for three years.

The report also highlights long-standing problems with the council's handling of grants from Europe and the Welsh Development Agency.

It calls for better management after almost £2m was withheld from the scheme to improve roads in the county because of insufficient record-keeping.

The council may also have to repay millions of pounds of grants.

However, the authority has said the auditor praised dramatic improvements in recent years.