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Police have been called in, and the Serious Fraud Office notified, after the Dunedin City Council this afternoon revealed the full size of an alleged $1.5 million fraud within its Citifleet department.
The decision was confirmed by council chief executive Dr Sue Bidrose in a statement following the completion of a three-month investigation by Deloitte.
Dr Bidrose said the alleged fraud now involved the sale of 152 council vehicles, and missing proceeds worth more than $1.5 million, over more than a decade.
It appeared the fraud was possible because of ''inadequate internal checks and balances'' within the council, she said.
As well as referring the Deloitte's findings to police, the report has been sent to the Serious Fraud Office and the council's insurers, QBE, she said.
The council had planned to release Deloitte's report publicly once it was complete, but had decided not to, for now, following advice from police and the Crown Solicitor, Dr Bidrose said.
''A formal complaint was laid with the police last week following an independent investigation by Deloitte which began in late May.
''The matter is now with the police and on their advice, and the advice of the Crown Solicitor, we are not releasing the Deloitte report at this stage, to ensure we do not prejudice any police investigation.
''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.''
The investigation began days after Citifleet team leader Brent Bachop died suddenly on May 21. His death has been referred to the Coroner.
The investigation has so far cost the council $200,000.