Selby District Council chiefs were said to be "fuming" today after being branded the worst performing local authority in North Yorkshire.
Most of the criticism in the Audit Commission's confidential draft report is aimed at management.
After a week spent assessing the council's "corporate performance", the independent watchdog gave it a "weak" rating.
It said the council did not have sufficient long-term plans and objectives in place, including budget strategies, and was not seen as a leader of the community.
So-called key performance indicators - such as how quickly the council dealt with planning applications and assessed housing benefit claims - also came in for criticism.
Almost half of Selby's key indicators were in the bottom quarter of the national league.
But sources close to the council said today that the draft report had taken a snapshot using "yesterday's figures".
One source said: "There have been big improvements in assessing benefits.
"In terms of key performance indicators, Selby Council now has only 20 per cent in the bottom quarter of the national league, compared with over 40 per cent last year. Both staff and members feel they have had a very raw deal and have asked the Audit Commission to justify some of their conclusions.
"It appears the commission's inspectors have some explaining to do, given the evidence that was provided."
The report comes only a fortnight after one councillor claimed the council's planning department was "close to meltdown" due to staff shortages.
Another source said: "The council's senior management totally refute the claim that they have no long-term objectives or budgets.
"They have consulted the community with a state of the area address, set up citizens' panels and spent £200,000 on community safety, including new youth facilities, to get teenagers off the streets.
"This is a real kick in the teeth and the council doesn't deserve it."
A Selby Council spokesman declined to comment, saying the draft report was confidential.
He said the Audit Commission was due to publish its final reports on all local authorities in North Yorkshire on May 6.
An Audit Commission spokesman said today that the performance assessment looked at a number of services, including housing, benefits and corporate abilities.
He said the ratings ran from poor to weak to fair to good, with the top rating being excellent. He stressed that Selby Council's report was a draft and council chiefs would be given the chance to respond before the final report was published on May 6.
Updated: 10:17 Friday, April 09, 2004
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