The cost of cleaning up the Dunedin City Council's
alleged $1.5 million Citifleet fraud is continuing to grow, but
the need for ''urgent'' answers justifies the bill, council
chief executive Dr Sue Bidrose says.
Council figures released yesterday showed the bill from the
alleged fraud had risen to $269,117, up from an estimated
cost of about $200,000 late last month, and was still
The bill included investigation costs totalling $178,771, as
well as legal and other expenses incurred by the council,
Dr Bidrose told the Otago Daily Times there was ''no doubt''
that added to the overall cost of the alleged fraud for
ratepayers, which she was ''not thrilled about''.
''But I needed answers and I needed them quickly, because
clearly, we had problems in our processes that allowed one
person to walk away with a lot of money,'' she said.
Dr Bidrose's comments came as chartered accountant Patrick
Houlihan - in an email to the ODT - questioned why police or
the Serious Fraud Office (SFO) had not investigated, and
incurred the cost, from an early stage.
An email from council staff - made public this week - also
appeared to suggest the council had asked the SFO to consider
investigating the alleged fraud, only to be rebuffed.
The email said a phone call by Deloitte staff to the SFO on
June 12 was made with the knowledge of council staff, and
''was us asking the SFO to consider an investigation''.
The Citifleet car park and office in Moray Pl. Photo by
SFO staff considered the request but decided not to
investigate, ''based primarily on the fact that the main
suspect was deceased, and that the actions appeared to be those
of one corrupt individual''.
An SFO spokeswoman, contacted by the ODT late last month,
said the criteria for investigating fraud were ''not rigid'',
but included an allegation involving sums of more than $2
It had been deemed ''more appropriate'' for police to
investigate, she said.
Dr Bidrose told the Otago Daily Times yesterday the council
''had our doubts'' the SFO would investigate.
Asked if she was disappointed, Dr Bidrose would only say she
was ''not surprised''.
''We always had some uncertainty about whether the SFO would
pick it up.''
However, she said the decision to use Deloitte was justified,
as answers were needed ''as quickly as possible''.
That included the need to know whether other staff were
complicit in the alleged $1.5 million fraud, and what gaps in
council processes needed to be closed, she said.
A police inquiry was ''never'' going to identify gaps in the
council's own processes, she said.
Instead, police were informed of the alleged fraud, told
Deloitte was investigating for the council, and were kept
informed, she said.
Deloitte's completed report was passed to police late last
month, and they are now investigating.
Dr Bidrose said it was ''impossible to say'' whether the
council's costs could have been reduced if police or the SFO
had investigated sooner.
''The work Deloitte has done we would have still been wanting
to do for our own change processes,'' she said.
''I struggle to believe that any business ... would be
willing to go on for a long period of time not knowing if
currently employed staff were committing fraud, or whether it
had major holes in its financial processes.''