Across Scotland it is estimated local authorities are missing a massive £200 million from the funds they need to clean up the mess made by dozens of opencast coal mines because insurance policies intended to pay for restoration work were inadequate.
It has led to the disfigurement of large areas of East Ayrshire, the most affected region.
Now an independent review commissioned by the local authority has made 14 recommendations for change amid warnings that monitoring of sites was "wholly inadequate". It raises concerns about the safety on abandoned sites and says this must be addressed as a matter of urgency.
It reveals that Jim McKinnon, former chief reporter to the Scottish Government and chairman of the review panel, had warned seven years ago about problems with restoration guarantee bonds on sites to no avail.
East Ayrshire Council will tomorrow consider proposals for a formal disciplinary investigation over the shortcomings uncovered by the review team.
The falling price of coal forced Scottish Coal into liquidation in April. Another opencast company, ATH Resources, was wound up in May. Their collapse threw the future of opencast sites in six local authority areas into doubt.
East Ayrshire faces the biggest problem. Some 22 sites face a £132m shortfall on a total restoration cost estimated at £161m. There are also major deficits in South Lanarkshire (£34m) and Dumfries and Galloway (£15m).
The review team looking at East Ayrshire said a failure to appoint independent assessors, paid for by the mine operators, was completely inexplicable and a significant failure.
The report highlights a lack of direction and supervision within the council planning department. It said there appeared to be "little or no control or challenge" to the way certain officers discharged their duties.
"The lack of awareness within the senior management of East Ayrshire Council of the environmental damage wreaked by the operators who have gone into administration and the financial implications of their actions/inactions is something we have found difficult to understand or explain," it said.
It added that "persistent failures" to comply with the terms of planning permissions and legal agreements should have been identified and addressed.
Ayr, Carrick & Cumnock MP Sandra Osborne said the "damning" review described a catalogue of failures and called for governments to act with financial assistance to "clear up the mess".
"It is not good enough to abandon the people of the coalfield communities because there is no budget line. Funding has been found for other significant damage and it should be found for this too," she said.
She said she had asked government officials whether action could be taken against company directors who are deemed to have acted irresponsibly, and been told this would be up to KPMG as the liquidators.
Blair Nimmo of KPMG, acting as liquidator for Scottish Coal, said: "As this relates to issues which occurred prior to our appointment, as you would expect we are not in a position to make any comment."
Fiona Lees, chief executive of East Ayrshire Council, said: "Should the council agree the recommendations, there are in place procedures which set out the way in which the head of human resources will undertake the initial detailed investigation into each failure that has been identified by the Independent Review Team; the outcome of this initial process should not be prejudged.
"Following the conclusion of this investigation, any disciplinary action which requires to be taken will be in accordance with established procedures."