DCC Continues to Improve Processes

Dunedin (Thursday, 25 June 2015) – The Dunedin City Council has made considerable changes to its processes since the Citifleet fraud was discovered last year.

The Dunedin City Council will continue to focus on internal improvements in the wake of today’s Police announcement no prosecutions will take place following their investigation into the Citifleet fraud.

DCC Acting Chief Executive Officer Grant McKenzie says, “The Police conducted a thorough and detailed investigation, but we are disappointed those who directly profited from the fraud won’t be held to account through the criminal justice system.

“We appreciate the Police efforts and we can assure ratepayers that although there will be no criminal prosecutions, people within the organisation have been held accountable.”

Deloitte was engaged by the DCC in May last year to conduct an investigation after staff identified what appeared to be a discrepancy in the number of Citifleet vehicles when implementing new financial procedures related to DCC assets.

The fraud totalled more than $1.5 million and centred 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 wide-ranging Deloitte investigation.

The report identified several other areas of potentially fraudulent activity, including inappropriate use of DCC fuel cards, purchase of a vehicle for personal use and inappropriate use of DCC vehicles. The Police were asked to investigate any matters arising from the Deloitte report.

Mr McKenzie says, “The thoroughness of both the Deloitte and Police investigations means we are confident everyone within the DCC who should have been held to account has been.”

The Deloitte report was clear that a single person committed the fraud in a number of different ways over at least 10 years. The report looked at a range of issues, including the ways the fraud was carried out and internal control failings at the DCC.

Mr McKenzie says late last year the DCC has completed employment processes relating to a small number of staff. The DCC has received a $1 million insurance payment – the full amount of its insurance cover in this area.

The organisation is continuing to take significant steps to make sure the appropriate levels of accountability and oversight are now in place.

“We have been working hard to improve and modernise our processes. This work has been going on for well over a year and is how the Citifleet fraud was uncovered in the first place.

“We want to have robust systems and processes that protect both employees and the organisation. This will continue to be our focus.”

Mr McKenzie says a wide range of work has been completed to improve and modernise DCC processes. This includes:

• the introduction of a new Audit and Risk Subcommittee, with an independent Chair

• updating the fraud policy and procedures

• introducing a new internal audit policy

• updating the asset disposal policy and procedures

• that all tenders awarded through the DCC Tenders Board are published on the DCC website for greater transparency

• putting in place a central contracts register

• updating the ‘whistleblower’ policy

• a review of fleet card processes and the issuing of cards.

Further work in progress includes:

• a fraud awareness campaign and training for staff, which will begin in July

• recruiting a dedicated Risk and Internal Audit Manager

• a risk management framework, which is almost complete

• the development of a new sensitive expenditure policy and procedures

• the development of new procurement and tendering processes across the DCC.

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