Keighley Town Council’s finance officer, Safia Kauser, gave a bleak assessment of the profit and loss situation in a report to councillors.
She warned that losses were likely to increase and that the council - currently at the centre of a police probe following a damning audit report - is “falling short of the accounting and governance standards that is expected of councils.”
Councillors were told that financial projections to March 31 this year included unexpected losses.
The bar/catering was expected to make a £7,600 profit but the reality will be a projected £2,800 loss. The cafe was set for losses of £8,000 but is now forecast to lose around £26,000.
Only the Police Museum is expected to make a profit, about £3,000.
The overall losses for the civic centre are expected to be £193,000 by the end of March.
Miss Kauser says the council breached financial regulations by failing to manage budgets and risk. And she warns that cash reserves could become exhausted if they continue to be used to fund overspending.
The civic centre committee has used reserves to cover budget overspending for the past two years.
The problems may lead to the council failing to comply with annual governance statements - for the second year in a row.
Miss Kauser concludes: “...as a corporate body this Council is falling short of the accounting and governance standards that is expected of councils and it is anticipated it may fail its external audit for 2015.”
Local campaigner Elizabeth Mitchell, who has helped expose poor governance at the council, has contacted Keighley MP Kris Hopkins with her concerns about spending. Mr Hopkins previously described spending as “reckless”.
Mrs Mitchell said the council had decided to continue trading despite the losses.
“Surely if the council is continuing to make trading losses, despite being warned it breaks financial rules, they are acting outside of their powers.
“The report (by Miss Kauser) warns them in advance they are likely to fail their audit yet again.
“This abuse of power cannot continue, year in, year out, it is damaging the town. The government need to step in with this rogue council and I shall be contacting my MP.”
The council declined to comment.