A council boss suspended over bullying claims was previously investigated for alleged fraud.

Sari Conway, chief executive of Eastbourne Borough Council, was suspended on Tuesday night following claims about her management style.

But documents leaked to the Argus reveal Mrs Conway was also investigated in 1998 over her financial affairs when she was accused of unauthorised use of her council credit card and falsifying expenses.

It is understood no action was taken against Mrs Conway. Last night the council refused to comment on the probe, which has never been made public before.

The investigation was carried out in secret after the then borough treasurer, Allen Gales, said "certain irregularities" had been brought to his attention.

Mr Gales wrote to council leader Bert Leggett saying that, if proved, the claims could constitute gross misconduct.

Council financiers first became aware of alleged irregularities after examining Mrs Conway's expenses claims and credit card transactions made during 1998. Transactions examined included using a council credit card to buy an air ticket, priced £98.

At the time of the visit Mrs Conway was on compassionate leave to visit her ill mother in Yorkshire but she said the expense was for a meeting at Leeds University and to meet other commitments. She was also accused of using council money to pay for four tickets and £159 worth of drinks at the Eastbourne Mayoral Ball on April 3, 1998.

Mr Allen's report said of the ball: "This is a voluntary event, run for charity.

"It's purpose has nothing to do with council business and attendance can and should be treated as a social charity event. On no account should the council be seen to contribute directly to the event, in terms of paying for tickets, etc." The report ended: "I consider that these constitute possible theft and fraud and should be treated as gross misconduct."

It is understood Mrs Conway was approached by the borough treasurer over the allegations and said she booked the flight as she had a variety of appointments, including a visit to Leeds University that weekend, and flying was the cheapest and easiest way to meet them all.

Regarding the mayoral ball, she "felt it was reasonable to use the event to promote the council to business". When Mrs Conway was approached by the Argus last night she refused to comment on the allegations.

She became the first woman chief executive of the council in 1995 and appeared on the BBC Changing Rooms series last year, swapping homes with Belle Tout Lighthouse owner Mark Roberts.

This week's suspension followed a meeting of councillors behind closed doors. A council source said the suspension followed "serious allegations of bullying" made against Mrs Conway by staff. The source added: "We are looking very closely at her man-management skills."

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