The Welsh Audit Office seem to be very fond of them so maybe not so rare there. Sadly my current council has had one issued but long before my time as a councillor. As has been said, it is where the external auditor finds something so serious that they issue the report which must be put before the public in a special meeting. It is a lengthy document detailing all the issues and recommendations for correction and where one is issued, the council cannot claim exemption from external auditor review (i.e. if a small council) for the next two or might be three years. The reports are also published by the auditor. I've certainly read some of the recent welsh ones recently and they can be pretty brutal. They don't just indicate circumstances where fraud might be applicable but mismanagement generally, innocent or deliberate. It's a pretty serious thing to happen and indicates to your residents that the council is not fit for purpose.