Code-of-conduct breaches have been upheld against two Tasmanian councillors. 

The Huon Valley Council has faced criticism over the appointment of general manager Jason Browne, who was in a relationship with the boss of the recruitment company engaged to help fill the position.

A report by Tasmania's Auditor-General last year found that the council failed to adequately manage the conflict of interest.

A code-of-conduct investigation was undertaken after a complaint made late last year against four councillors: Sally Doyle, Mick Newell, Christine Campbell and then-mayor Bec Enders - the members of the selection panel responsible for the general manager's recruitment.

Both Cr Enders and Cr Campbell resigned prior to the finalisation of the investigation, and had no findings made against them. 

But the two remaining councillors - acting mayor Cr Doyle and Cr Newell - have had their code-of-conduct breaches upheld. 

Cr Doyle and Cr Newell allegedly believed that legal advice told them the actions of the council's selection panel were acceptable, but the panel did not manage the risk that Mr Browne's appointment could be perceived as being “tainted by bias”.

“There was an unacceptable ignorance of the proper mode of dealing with the situation, which falls below the standards of conduct one can reasonably expect from a councillor,” the investigation's report says.

The council should have replaced the recruitment consultant when the conflict of interest became known, the report says. 

“The failure was unsatisfactory governance conduct of such significance that it brought the council into disrepute,” the report said.

“The community deserved better.

“The selection panel, including [Cr] Doyle and [Cr] Newell, were at best naive, resulting in a loss of public confidence.”

Cr Newell said he was “pleading innocent of any wrongdoing”, and “at no stage through the recruitment process did I ever think that I was doing anything wrong”.

Cr Doyle said: “I listen to the public and also the professional advice put before me. I decided that professional advice was what I needed to adhere to … so I declare not guilty.”

Both councillors will face local government elections later this year.