Other councils have policies in place

A sensetive expenditure policy has been implemented by the Queenstown Lakes District Council as a direct result of the fraud at the Dunedin City Council.

But QLDC chief executive Adam Feeley, former head of the Serious Fraud Office, said a determined fraudster ''will usually find a way to do it''.

A Deloitte report says the fraud cost the DCC at least $1.59 million, through the sale of 152 council vehicles by former Citifleet team leader Brent Bachop, personal spending on council fuel cards and the purchase of a $7333 trail bike.

Earlier this year, the QLDC audit and risk committee, chaired by Institute of Directors president Stuart McLauchlan, of Dunedin, recommended a sensitive expenditure policy be adopted in the wake of the Citifleet fraud.

The policy, circulated to QLDC staff last month, states surplus assets with a market value of more than $500 will not be sold to elected members or employees without prior approval.

The document says: ''Council will not permit direct sale to friends or acquaintances of elected members or employees, for a surplus asset with a market value of more than $500.''

The policy also states spending on farewells, long service and retirements should ''not be extravagant or inappropriate'' and only ''reasonable'' expenditure will be reimbursed.

Mr Feeley said yesterday the council had several policies aimed at managing difficult financial issues.

''Ultimately, a person determined to commit fraud will usually find a way to do it.

''A strong staff culture minimises that risk, as do good processes and systems, at least to detect fraud where it has occurred. ''An organisation which is confident it won't ever have fraud will be most at risk.

''We're conscious of the risk and do our best to manage it.''


Central Otago District Council

The Citifleet fraud had prompted the Central Otago District Council to look at its own procedures, Central Otago Mayor Tony Lepper said.

''We have certainly got plans for changing the way we run our audit and risk committee. We have one, and it does not meet that often, but next year it's going to have its own meeting day.''

Members of the committee would be drawn from those in council with the most financial skills, he said.

''We are also going to employ some external auditors to do some work that the committee will ask [them] to do to check our own systems.''

There had been no cases of fraud within the council in its history, he said.

However, the DCC incident had highlighted it could occur.

While he was ''absolutely'' confident in his staff, it was said you ''could never be sure'', so the council was putting systems in place to deal with and prevent it from happening.


Clutha District Council

Clutha District Council chief executive Steve Hill said his council, with about 75 staff, was much smaller than the DCC.

''Everything is much more visible.

''For example, there's no way we wouldn't know how many vehicles we're supposed to have.

''We don't have a fleet, or anything like that, and we don't have a lot of vehicle turnover.''

Mr Hill said the council had policies for sales of council assets to staff, and they required ''transparency and openness''.

''The risk of fraud is always there, and we are expected to have mechanisms in place to identify and minimise the risk,'' Mr Hill said.


Waitaki District Council

Systems in place at the Waitaki District Council are appropriate to the size of the organisation and the risks it faces, its chief executive Michael Ross says.

''However, like most councils, we have looked at what has happened at the DCC to see what lessons we can learn from its experience.''

Now the Deloitte report had become public, the council could further analyse its findings.

The council already had systems in place to manage and minimise risks such as fraud.

Because its management and financial systems were relative small, compared with Dunedin city, the Waitaki council was able to carefully examine its expenditure and revenue and investigate any identified anomalies thoroughly, Mr Ross said.


Otago Regional Council

Otago Regional Council chairman Stephen Woodhead said he wrote to chief executive Peter Bodeker earlier this year asking him to review the council's policy on capital expenditure and asset disposal and report to council.

The report showed there were clear accountabilities and no issues that needed addressing.

Councillors have no credit cards and the chairman has a fuel-only card for his vehicle.



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