Dunedin City Council jobs could be on the line as the
organisation reels from an alleged $1.5 million vehicle fraud.
Council chief executive Dr Sue Bidrose yesterday described
the alleged fraud - involving the sale of more than 150 cars
over more than a decade - as ''unprecedented'' in the
The Otago Daily Times understands that, as a result,
the council may go after the car buyers, and other parties
said to have profited from the alleged fraud, in an effort to
recover ratepayers' money.
The revelation came as the council yesterday confirmed it had
called in police and notified the Serious Fraud Office
following Deloitte's three-month council fraud investigation.
The probe had revealed the full extent of the alleged
decade-long fraud, which now involved the sale of 152
vehicles and the pocketing of more than $1.5 million in
proceeds, Dr Bidrose said.
The company's full report had been expected to be made public
last week, but was withheld yesterday following advice from
police and the Crown Solicitor, Dr Bidrose said.
That was to avoid prejudicing the police investigation that
would now commence, she said.
''We have committed to keeping ratepayers and residents
informed, but my first priority has to be that the
appropriate authorities hold people accountable and we try to
recover some ratepayers' money.''
Police area commander Dunedin Clutha Waitaki, Inspector Jason
Guthrie, confirmed the council's complaint about
''significant historical fraud'' would be investigated.
''Police anticipate that there is likely to be a large number
of wide-reaching inquiries to conduct as part of this
investigation and that it will take some months to
The Deloitte investigation, which has so far cost the council
about $200,000, was launched after Citifleet team leader
Brent Bachop died suddenly on May 21.
His death, which came days after being approached about
discrepancies within the Citifleet department, has been
referred to the Coroner.
Through a spokeswoman, Mr Bachop's wife, Maria Smith,
declined to comment yesterday.
A copy of Deloitte's report had also been sent to the
council's insurer, QBE, as well as the Serious Fraud Office,
due to the level of fraud alleged.
It was not yet known what role, if any, the SFO would have,
but police were conducting the investigation.
In the meantime, council staff were in the firing line after
Deloitte found the alleged fraud was made possible by
inadequate checks and balances within the council.
Dr Bidrose said the checks ''should have been in place'' and
a small number of council staff were involved in ''employment
processes'' as a result.
The ODT understands about five council staff were
involved, although there was no suggestion they were
complicit in the alleged fraud itself - rather, they had
failed to detect it.
Dr Bidrose would not comment on their likely fate yesterday.
''I've just got to let the process run its course.''
She would also not be drawn on other details of the
investigation, but went further in an internal message to all
council staff, obtained by the ODT, yesterday.
In it, she said the council's internal controls had failed to
keep pace with best practice and there was ''little for us to
take comfort from in the whole episode''.
''This is a significant issue for the DCC, unprecedented in
the history of our organisation.
"And, sadly, it will reflect badly on our entire organisation
and do us reputational damage.
''There is no doubt our approach to some things - such as
declaring conflicts of interest, taking gifts and tickets,
private use of council vehicles - has been too relaxed.
''Throughout [New Zealand] and internationally, changes have
been made and the DCC has not kept pace,'' Dr Bidrose said.
The alleged fraud had been detected only when the council
began tightening its internal controls last year, and staff
were no longer able to buy cars or any other council assets,
That work would continue, but some council staff ''may find
the changes difficult'' - something she would not
''I know this is an organisation in which our ratepayers can
have faith ... but I also know we will be having to prove
this again in [the] coming days.''
The ODT reported last month about 25 of the Citifleet
vehicles appeared to have been sold to members of one Dunedin
family, unconnected to the council or to any city motor
vehicle dealership, before being on-sold.
Another 25 cars have been sold to past and present council
staff, including a former senior manager, Grant Strang, and a
former city councillor, Maurice Prendergast.
Both are said to have followed proper processes at the time
and there are no suggestions they were involved in the
Allegations of ''backhanders'', the role of two city car
dealerships and other claims were also investigated by
It was not yet known exactly how long the police
investigation would take, but the ODT understands it
was hoped it would be finished before Christmas.