An investigation into the operation of Dunedin City Council’s Citifleet division has been released – blaming the loss of $1.5 million on the divisions former manager.
Deloitte was engaged by the DCC in May to launch an investigation after staff identified what appeared to be a discrepancy in the number of Citifleet vehicles when implementing new financial procedures.
Soon after questions were first asked, Citifleet manager Brent Bachop died in a suspected suicide.
The alleged fraud totals more than $1.5 million and centres on the DCC receiving no proceeds from the sale of 152 vehicles from the DCC’s vehicle fleet. A formal complaint was laid with the Police in August following the Deloitte investigation.
Of 274 asset disposals covered in the investigation, 152 were sold with no funds returning to the council. A further 103 were sold with no way to ascertain if the correct value was achieved.
There were dealers involved, with 14 sold to the trade – some despite the vehicle not not being shown as being owned by Bachop, and with the funds being paid directly to him. The report suggests why people paid Bachop when the vehicles were clearly not owned by him may need to be investigated by authorities.
Bachop also allegedly incorrectly used fuel cards, purchased a trail bike for personal use, and inappropriately used cash from council cheques drawn – among other accusations.
The Police were asked to investigate any matters arising from the Deloitte report.
DCC chief executive Sue Bidrose notes the report lays the blame on the one person – Bachop.
“The Deloitte report is clear that a single person committed the fraud in a number of different ways over an extended period of time,” Bidrose says.
“The fact this could happen was an indictment on our business processes and we have made considerable efforts to improve and modernise these. This work was already underway and was how the fraud was uncovered.”
“Measures have been, and continue to be, taken to make sure the appropriate level of accountability and oversight is in place in the future across the organisation.
Bidrose says the DCC has completed all the employment processes identified in the Deloitte report. These relate to a small number of staff, but she will not be discussing individual employment matters in public.
The DCC has received a $1 million insurance payment following the Citifleet fraud. The DCC had $1 million fidelity insurance and insurers QBE have paid out the total amount, in two separate payments.
The report can be downloaded here
