Birmingham City Council has terminated its contract with a firm that provided transport for children with special needs after a report found less than half of the operator's staff had the correct background checks.
Council officers auditing the firm, which was responsible for transporting 848 children in all, "could only assure themselves of 51 out of 110 employee records," the report said.
The local authority began pursuing the audit after it suspected the provider, North Birmingham Travel, had breached a condition in its agreement with the council by "making a material misrepresentation in relation to providing correct and accurate information in regards to Disclosure Barring Services (DBS)".
Birmingham's report explained that the provider supplied a form to the council that detailed an employee's approval that appeared to be tampered with "and did not look like an original". An officer followed this up with HR, and it was confirmed a unique reference number needed as part of the process did not exist, and there was no record of the employee in the records kept by HR.
Birmingham issued two Rectification Notices in the August for further concerns around information supplied and safeguarding concerns. Following this, officers lost confidence in the provider's ability to carry out its safeguarding responsibility, and the council terminated the contract.
The matter has now been referred to the Local Authority Designated Officer for further investigation and possible referral to the police.
The council has two weeks to secure a new transport provider for the children.
Birmingham said it is in talks with other transport providers. The council said that there are at least two organisations large enough and "feel capable of mobilisation within the timeframes given," the council reported.
The report's findings come after Birmingham received criticism from the Local Government and Social Care Ombudsman in June this year after the watchdog found the council failed to provide free transport for at least two children who could not manage their journey to school independently.
Inadequate record-keeping was also uncovered by the investigation, alongside practices that were not in line with statutory guidance.
North Birmingham Travel has been contacted for a statement.