Paul Davies is also accused of awarding work worth more than £480,000 to an organisation of which he is a trustee.
He was executive director for social care and inclusion at Walsall Council but was axed in March this year for misconduct after being suspended for 15 months following an independent investigation.
He has launched a claim for unfair dismissal denying misconduct in his post, which he took up in 2010.
An employment tribunal is now being held in Birmingham.
The hearing was told that he led the appointment of Walsave Credit Union to handle £3.5m of funding for care services.
There were concerns about the level of due diligence carried out, but he pushed ahead with authorising the payment.
It was also said that he awarded work worth more than £480,000 to an organisation of which he is a trustee. Although this was declared, concerns were raised by procurement staff about a lack of competition for the contract.
There were also concerns raised about the lack of a proper procurement process for the appointment of Tunstall Healthcare UK.
It was part of an agreement to provide telecare equipment as part of a project with funding from NHS Walsall.
Mr Davies has denied wrong-doing and the tribunal is expected to last three weeks.
An independent investigation was conducted by law firm Bevan Brittan.
The findings were presented to a board of elected members who found enough evidence to dismiss Mr Davies.
Mr Davies joined the council in spring 2010after moving from Oldham Council, where he had been assistant executive director for adult social care since 2004.
The tribunal continues.