A $1-million grant given to the Halifax Seaport Farmers' Market was not handled properly and may have even violated the municipal charter, according to the city's auditor general.

Larry Munroe presented a report to the Halifax Regional Municipality's Audit and Finance Standing Committee on Wednesday, criticizing the grant process.

Halifax regional council had approved a $1-million grant for the new farmers' market through the HRM Community Facility Partnership Fund.

The money was transferred and the new building opened in August 2010, but Munroe said he wasn't impressed with the process.

He said the grant was never evaluated properly, the agreement was never vetted by the legal department and there was no followup to ensure the grant was used properly.

"There are circumstances — and this particular one is likely one of them — where you can get a perfect storm," Munroe told councillors on Wednesday.

Munroe also said giving money to this project — a profit-making organization — probably violated the Halifax Regional Municipality's charter.

"I struggle with the notion that we put $1 million into an organization that, in fact, did the project and now rents it to a profit-making organization," he said.

"What is the spirit of the charter as opposed to, perhaps, the direct words?"

Coun. Sue Uteck said the situation made her angry.

"It's rather stunning," she said.

"How far does council go after we make a decision to expend money? Am I supposed to vet the contract? Look at the final agreement?"

Munroe made 33 recommendations to prevent similiar situations from happening again.

Halifax Regional Municipality managers have promised to follow up on all the recommendations to ensure there are no problems in the future.

The Community Facility Partnership Fund used for the Seaport Market is still in place — it was used to help build the Citadel High School auditorium.

The Halifax Seaport Farmers' Market is struggling with a multimillion-dollar debt and smaller crowds than anticipated through the weekdays.