The four authorities handed out 56,138 government grants aimed at supporting firms through Covid, totalling £352m.
And the Express & Star can reveal that three councils rejected almost £20m in claims they believed were either potentially fraudulent or made in error.
Wolverhampton Council paid out £81m to 15,638 businesses and prevented nearly £15m of potentially fraudulent claims from 5,000 applications.
Walsall Council handed out £82m in grants to 14,500 firms. A total of 850 claims were denied, totalling £4m.
Meanwhile Sandwell Council paid more than 11,000 grants totalling £84m to businesses in the borough. The authority says it stopped more £600,000 worth of potentially fraudulent claims.
Dudley Council paid nearly 15,000 grants, totalling almost £105 million. No figures are available on fraudulent claims in Dudley.
A Wolverhampton Council spokesperson said: "Small businesses are the backbone of our economy and over the course of the pandemic we ensured thousands of eligible businesses and community organisations had quick access to a range of grants to help them through this most difficult time.
"City of Wolverhampton Council paid 15,638 business grants totalling over £81million to Wolverhampton businesses.
"More than 5,000 claims for grants were denied as they did not meet the eligibility criteria. The checks undertaken by the council ensured that only those business that met the eligibility criteria received grants – preventing more than £15 million of potentially fraudulent claims."
A spokesperson for Walsall Council, said: "Walsall Council paid more than 14,500 grants worth over £82m to support Walsall businesses during the pandemic.
"Around 850 claims were denied due to various reasons, such as non-entitlement, claims made in error and duplicate claims. The potential value of these ineligible claims was around £4m."
A spokesperson for Sandwell Council said: "Over the course of the pandemic, Sandwell Council paid more than 11,000 business grants totalling over £84m to Sandwell businesses.
"The extra checks put in place have meant we've been able to make sure the money intended to help businesses was only paid to those eligible – stopping more than £600,000 worth of potentially fraudulent claims."
A number of people have been through the courts for making fraudulent claims. They include former Sandwell Council employee Naseem Khan, 45, who tried to claim cash for a business based in West Bromwich High Street in June 2020. Khan, of Cordley Street, West Bromwich, was given a 12-month community order at Walsall Magistrates' Court on January 19.
Nationally almost £27bn was allocated through the Covid-19 Business Grants scheme, which delivered over 4.5m payments totalling £22.6bn.
Struggle to recover fraudulent Covid-19 grants still going on
Almost three years after the start of the coronavirus pandemic, the battle to recover cash lost to dodgy business grant claims goes on.
The Department for Business, Energy and Industrial Strategy (Beis) said almost £1 billion has been lost due to fraudulent or erroneous claims by businesses supposedly struggling during Covid.
The figure makes up around 8.4 per cent of all grants distributed via the small business grants fund (SBGF), the retail, hospitality and leisure business grants fund (RHLGF), and the local authority discretionary grants fund (LADGF).
And while the Beis acknowledged that the majority of these payments were unlikely to be recovered, local authorities across the country helped to prevent the scale from being far greater.
Across the Black Country three councils rejected almost £20million in claims they believed were either potentially fraudulent or made in error.
Gareth Davies, head of the National Audit Office, said 0.4 per cent of all the “estimated irregular payments” paid out in grants by local councils had been recovered.
Nationally almost £27 billion was allocated through the Covid-19 Business Grants scheme, which delivered over 4.5million payments totalling £22.6billion.
The range of business grants on offer were not the only Covid support schemes subjected to widespread fraud.
Around £1.4billion of bounce back loans given to small businesses have been classified as fraud.