Dunedin City fraud

Otago Daily Times have combined information from a police investigation file released yesterday under an Official Information Act request and Deloitte’s full report (of their investigation) that was leaked to ODT last month.

Two escape Citifleet prosecution

A police report suggests Brent Bachop’s death and a right to silence may have helped two others escape prosecution following the Dunedin City Council’s $1.5 million Citifleet fraud.

The police investigation was launched last year after Deloitte found Mr Bachop, the former Citifleet team leader, to be at the centre of the decade-long fraud.

He was found to have sold 152 council vehicles, while pocketing proceeds, and police concluded in June there was insufficient evidence to charge anyone else in relation to the fraud.

But the police investigation file, released yesterday following an Official Information Act request, questions the actions of two other parties – a Dunedin car dealer and an unnamed woman – who were not charged.

There was evidence both parties had ”potential culpability”, one for receiving stolen goods and the other for conversion of a council vehicle.

However, the death of Mr Bachop – who was not named directly in the police report – and the right to silence meant both had a defence that could not be overcome, it said.

That conclusion came despite the actions of one of the parties – a salesman at an unnamed Dunedin car dealership – being considered ”highly suspicious”, the police report said.

The ODT goes on to explain the reasoning by the Police for not prosecuting, and they name the woman and the car dealership. They didn’t name the salesman himself but I’ve seen his identity revealed online previously.

While these two individuals have escaped prosecution the burden of their exposure as highly suspect will live with them.

And Dunedin City Council has a severely stained reputation on this as well. One hundred and fifty two cars not being accounted for over ten years shows extremely lax asset management. Several senior staff have resigned since this was publicised.

Stuff also reports: Police raised possibility of others involved in Dunedin City Council Citifleet fraud.

The police investigation followed a Deloitte’s report which suggested six potential areas of criminal activities: 152 missing vehicles, credit card/fuel card spending, purchase of a motorbike, council vehicle conversion and cashing cheques for refilling parking machines.

The subsequent police investigation was to determine if anyone other than Bachop was involved in fraudulent activity, and if anyone had culpability as to the offending, or as a receiver.

Police spoke to all but three of the people who bought one of the 152 vehicles. Those three people could not be traced.

“Almost without exception the purchasers of the vehicles stated that they believed (Bachop) was entitled to sell the vehicles and had no reason to believe that he was not forwarding their money onto council,” the report noted.

So it remains unknown whether any of the car purchasers had any inkling they were getting bargains at the expense of ratepayers or not.

And the ‘negligence’ of the Council is pointed out.

The report also concluded that the council’s finance department was “negligent” in the way they maintained the fixed asset register.

“There is no evidence that anyone deliberately turned a blind eye to the errors on the register, nor is there any evidence that anyone in the finance department would have any motivation to complicit in (name withheld) offending.”

Negligence is a mild description for a finance department that did not detect that an average of fifteen significant assets per year for ten years were disappearing from their books.

And this may not be all. The Council decided to not investigate further back than ten years due to difficulties in checking through records. What records? It’s basic stuff accounting for assets.

Brent Bachop took over management of Dunedin City’s vehicle fleet from someone who was referred to as ‘Arthur Daly’.

The known level of fraud and the lack of confidence that it was the only fraud is a very bad look for Dunedin.

We can only hope that the Council now has rock solid accounting and accountability.

Semi-support of Brent Bachop #2

While Dunedin City Council seems to want to bury and forget the Cityfleecing saga laying all the blame of Brent Bachop there are wider questions being asked at What if? Dunedin…

In response to the previous post – Semi-support of Brent Bachop #1 – ‘Phil’ comments:

Steve, I think that we all appreciate your comments on the boards.

My own impressions of Brent are similar to yours and others in many ways. Face to face, a nice guy. Not the sharpest knife out there, but he did appear to be trying to do the best for his department during my professional dealings with him. It is that side which makes the other side all the more difficult.

Most of us agree that Brent found himself in the middle of a pre-existing situation.

The Deloitte report says that they have been given information that DCC vehicles were sold to the public prior to Bachop taking over as team Leader of Citifleet.

In September the ODT reported Citifleet case goes further:

The Dunedin City Council’s alleged Citifleet fraud may go ”considerably further back” than first thought, and more cars – and more missing money – are likely to be involved, it has been confirmed.

The revelation came from council chief executive Dr Sue Bidrose and Mayor Dave Cull, who both told the Otago Daily Times the alleged fraud appeared to pre-date former Citifleet team leader Brent Bachop’s time in charge.

Mr Bachop took over Citifleet from former manager Bob Heath in 2003.

Dr Bidrose said the investigation could only easily examine computerised financial records dating as far back as 2003, as earlier paper records were more difficult – and costly – to trawl through.

However, evidence had emerged suggesting the alleged fraud pre-dated 2003, and had been going on ”for a long time”, she said.

”Everything would suggest to me it’s been going on since before 2003, which is when our financial systems enabled us to start looking at it.

”People have worked hard, or somebody’s worked hard, to cover it up,” she said.

Asked how far back it might go, she said: ”I don’t know, but people are reporting odd behaviour prior to 2003. We simply can’t quantify that.’

Mr Cull said he also understood the alleged fraud may have ”originated considerably further back than 2003”.

Mr Cull said he did not want to speculate on whether Mr Heath had also been involved in anything untoward, saying ”I wasn’t here then”.

However, others spoken to by the ODT have described the former Citifleet manager as the ”Arthur Daley of the city council”.

It was one of his enduring nicknames during his time at the council, and referenced the shady character from the long-running British television show Minder.

So there seems to have been a considerable “pre-existing situation” that a number of people were aware of.

What did the Council do about it? They appointed Heath’s apprentice to take over management of the fleet (and the fleecing).

Back to Phil:

I think that everyone also accepts that it would have been almost impossible for Brent to carry out what he did, for the length of time that he did, without some additional internal knowledge or support. By the same token, we would have to accept that his predecessor would also have required internal support.

So it is going to be impossible to know at what point Brent first became aware of the situation. What his rationale was in making his final decision, I guess we will never know. Maybe it was for selfish reasons, maybe it was so that it would be easier to explain away in years to come. No one will ever know for sure.

That no one with the motor trade industry even suspected that something may be wrong with the sale and purchase of DCC fleet vehicles borders on professional negligence, in my opinion.

Concerns have been expressed in the motor trade industry for years. The Council refused to listen.

While the company owners may not have been aware, those who signed off on the purchases had been working for enough years to know what felt right and what felt wrong. One can only hope that the corrective processes being carried out with the DCC are also being carried out by the dealerships involved as the public has to right to have confidence when dealing with both public and private professionals.

That’s why some dealers are demanding the culprits are named – see ODT Identify car yards – dealers.

I do maintain that those who sought out Brent within the DCC for purchase of a fleet vehicle, for the most part, genuinely thought they were getting a good deal from DCC. That’s why they went there in the first place.

There were many such deals available exclusively to DCC. Paint was cheap from a particular supplier, as were (I believed noted by the ODT) tyres. Ethically completely wrong, but legally it was all there in the employee handbook at the time.

In the time since this has come to light, there have been a number of people who have chosen to hide behind the legality curtain and have chosen to completely ignore the personal integrity issue of ethics.

As with the other discounts, we all knew that we were being offered something that wasn’t being offered to the public in general.

That is especially important when considering an item originally purchased with public funds. Disappointing, but now most people know who they are. I agree entirely that the case against those who made payments direct to Brent Bachop (and those people are both internal and external) is much simpler. A reasonable person would have questioned.

A lot of reasonable people deserve a number of questions answered, and about a lot more than Brent Bachop’s culpability.

Semi-support of Brent Bachop #1

While Dunedin City Council seems to want to bury and forget the Cityfleecing saga laying all the blame of Brent Bachop there are wider questions being asked at What if? Dunedin…

A comment from Steve Lewis:

What can one say about Brent? He was a pretty simple guy who took over a job where his predecessors had been on the take for years. There is no excuse for what he did and the hundreds who attended his funeral, who loved him, or in my case were his friends have had trouble coming to terms with what has happened.

The idea that Brent did all this alone is quite ridiculous, those who turned a blind eye, who knew the price they were paying could not be right but bought the car anyway.

The dealers who must have known they were paying well under market value, staff at the DCC who must have known things were not as they should be but chose to ignore the signs.

Brent’s family have been to hell and back, they are the victims here, they are the ones who cannot escape what for them is an ongoing nightmare.

Most of his wider family are probably innocent of any wrong-doing and Bachop’s death and the revelations of his alleged fraud will be tough on them. And especially on his children who are blameless.

The Brent I knew was a kind and generous person who I wish had chosen to face his punishment, he would have been supported, he would have ultimately been forgiven and moved forward with his life.

Some may have forgiven him, many would have found that difficult given the extent of the fraud and the length of time it was done for. But it’s sad he chose not to face up to it.

He was not in this alone, he was not some criminal Mastermind. He was a guy who got himself into something he could no longer control. For the DCC to now conveniently use him as a scapegoat speaks volumes about their integrity and morality.

The inquiry has been inadequate and has failed to rigorously investigate others who must have been involved, who must have understood the prices they were paying did not reflect proper market value.

Getting a bargain at the expense of ratepayers seems to have been a cultural problem.

To those who wrote cheques made out to Brent Bachop and not the DCC, or those who just handed over cash.

The Deloitte report that happened from Council staff and from car dealers who should have all known better.

There will be many still having sleepless nights, many who must know they are standing by hoping a dead man will carry the can for them and no more questions will be asked. I wonder how long it will be before someone finally breaks their silence and spills the beans on the whole tragic and sorry episode.

I think too many people have been to some degree involved or will have known things weren’t right for more of the story not to get out.

Now people see the Council led by mayor Dave Cull trying to bury and forget some will want more of the truth to be made public.

I don’t think there’s much doubt that Bachop made serious mistakes over at least a decade.

But to be fair to him and to the ratepayers he shouldn’t cop all the blame.

Bachop chose not to face the music but the Dunedin City Council seems to be trying to heap all blame on the conductor and bury the orchestra with him.

Citifleece – how many vehicles?

How many vehicles were involved in the Dunedin City Council fraud? How many vehicles does the council own now? How many does it need?

While it appears that DCC wanted to bury the Deloitte report detailing the fleecing of Dunedin ratepayers a number of important questions remain unanswered. There seems to be an attempt to lay all the blame on Citifleet ‘team leader’ Brent Bachop, now dead and unable to talk. Others must have been culpable to some extent.

A bit of simple arithmetic shows discrepancies in the number of cars involved in the fraud.

Kevin Thompson, the group manager who oversaw Citifleet (or was supposed to oversee Citifleet) resigned in September. The report of his resignation in the ODT – Another senior council staff member resigns – quoted some vehicle numbers:

In February, in an interview with the ODT, he said the council had 174 vehicles, together worth $2.5 million, but was looking to rid itself of surplus vehicles to make savings.

Council staff last month clarified the council had 122 vehicles, although the value of the fleet was still ”being worked through”.

The Deloitte report quotes some different numbers in their Background at the start of the report.

1.1 In late May 2014 Dunedin City Council began investigating discrepancies that have been identified between the record of Council owned vehicles held by it’s insurance provider and the record contained in it’s Fixed Asset Register (FAR) held by the Council’s finance department.

1.2 [Redacted] (Council Financial Analyst) asked Brent Bachop (Citifleet Team Leader) to assist in identifying the reasons for the discrepancies. Initially a total of 129 vehicles still on the FAR were identified by Mr Bachop as being no longer owned by the Council (or in the possession of the Council).

The report says that over the period of investigation (July 2003-May 2014) 274 vehicles were disposed of, of those 152 were “high risk” – no proceeds for them were received by the Council – and of those the ownership histories of only 113 were obtained.

Some questions from these numbers.

  • Where did the number of 174 quoted to the ODT in February come from? It can’t have been from the Fixed Asset Register if Bachop was correct saying in May that 129 on the Fixed Asset Register were no longer owned by the Council, because that would have left about 45 still owned vehicles on the register.
  • About half of the cars disposed of were removed from the Fixed Asset Register and about half left on, about ten each year. Why wasn’t this noticed?  Or was it noticed?
  • The number on the register must have been growing at about ten a year, the annual budgets for vehicle replacement were around $350,000-$400,000 or about ten vehicles. Why wasn’t this noticed?  Or was it noticed?
  • This still doesn’t add up. Was the Fixed Asset Register already grossly overstating the number of vehicles in 2003?
  • Are the 122 “clarified” number of vehicles in August as listed in the Fixed Asset Register or has the number come from somewhere else? Lists of vehicles should match but they obviously haven’t in the past.
  • Is 122 vehicles a reasonable number for a Council with staff of about 900, many of whom are part time (657 full time equivalent in June 2013)?
  • If the Fixed Asset Register had 129 too many vehicles on it why did no one consider why the Council might have something like 250 vehicles? Or if they did wonder why it looked like one in three employees might have use of a vehicle why was nothing done until this year?

Was the inability to consider basic numbers involving vehicles just extremely lax, or negligent, or complicit?

I’m sure there are more questions that could be asked about vehicle numbers.

Dunedin Citifleece car dealers identified

The Otago Daily Times has effectively identified the car dealers involved with Brent Bachop in fleecing Dunedin ratepayers (officially of $1.5 million but there have been claims the true amount of fraud could be $3 milliion or more) – Identify car yards – dealers.

And apart from the lawyer of one of these dealers trying to make excuses other dealers condemn what was going on and want to be distanced from the “smear” on all dealers.

Names were blacked out in the Deloitte report but the ODT has identified dealers who were investigated.

…the Otago Daily Times has confirmed transactions with Dunedin City Motors and the former dealership Anngow Motors were examined by Deloitte, and understands the former dealership Armstrong Mazda was also investigated.

Dunedin City Motors dealer principal Robert Bain has declined to comment about anything in Deloitte’s report into the fraud, as has Armstrong Motor Group general manager Muir Gold, who also declined to comment on whether Armstrong Mazda was one of the companies investigated.

Unlike other dealers they haven’t denied being investigated.

ODT reports show Anngow Motors was sold to Armstrong Mazda in 2007, and Armstrong Mazda was sold to Dunedin City Motors in 2009.

So there’s an ownership link between all three dealerships. The ODT gives transaction details.

Dealership 3: Bought four council vehicles between 2003 and 2006; council received some proceeds in three cases. Paid DCC directly for three cars, and Mr Bachop directly for the other, for which the proceeds never went to council.

Dealership 2:  Bought three council vehicles in 2008; council saw no proceeds from sales. Ownership of each transferred from DCC to Mr Bachop shortly before the sale. Allowed a council vehicle, bought from same dealer three months earlier, to be used as a trade-in for a personal vehicle bought by Mr Bachop.

Dealership 1: Bought seven DCC vehicles between 2006 and 2012; council received some proceeds from one sale. Ownership of five transferred from council to Brent Bachop shortly before dealership bought them. Dealer aware of that in three cases. Proceeds for other vehicles paid directly to Mr Bachop despite still being in council ownership.

It’s easy to deduce which dealership is probably which from the dates. And it’s easy to deduce that shady dealing was happening.

A lawyer for one dealer who bought seven vehicles from Mr Bachop between 2008 and 2012, told Deloitte it was ”not uncommon” for vehicles previously sold privately to remain registered in the name of the former owner, or be transferred shortly before a sale to the company when the vendor realised the registration had not been changed.

It should be not common for a city council fleet manager to sell cars to himself and then on sell then to a dealer. It sounds highly suspect.

Staff had no knowledge of any apparently unlawful activity by Mr Bachop, who at all times appeared to them to be a trusted employee of council, they said.

Obviously it’s a lawyer’s job to diminish the culpability of their client but it doesn’t look like “trusted employee” activities. A car dealer interviewed by the ODT has a different view.

”It would be completely abnormal for many people to buy a car and change their mind about it that quickly,” one said.

And a car dealership director recognises issues.

A former director of Anngow Motors, Geoffrey Anngow, has confirmed that Deloitte had examined the company’s transactions. Mr Anngow said he was not privy to the company’s dealings with Mr Bachop, which were always conducted by Anngow staff.

He had ”absolutely no idea” if anything untoward was going on, but if he had become aware of any of the behaviour suggested by Deloitte, he would have ”recognised that was not kosher”, he said

I think it was fairly obviously not kosher.

ODT interviewed a number of dealers, some of whom did not want to be seen to be associated with the Citifleecing, while others were keen to be named as not involved.

John Marsh, from Cooke Howlison, was keen to make it ”very clear” his company had no connection.

”We’ve had absolutely nothing to do with it.’

It was a smear on all the dealers in town until those involved were named, Mr Marsh said.

It would only be a smear if something shonkey was going on.

Others said they would want the person who owned a trade-in to sign the contract, as well as the person buying the new car.

”You need to check with the owner that the seller has authority to sell the vehicle. You have to be quite careful,” one said.

”We’re a small town. It’s shocking and there needs to be some accountability,” the dealer said, anonymously.

Accountability seems to be something the Dunedin City Council is trying to avoid. Why?

Another said there was no doubt Mr Bachop had done wrong, but it was ”a shame” all the blame was landing at Mr Bachop’s door when the necessary involvement of others was ”being swept under the carpet”.

Sadly mayor Dave Cull seems to give sweeping a higher priority than representing the interests of ratepayers.

Another hoped the Ministry of Business, Innovation and Employment, which regulates motor vehicle traders, and the Inland Revenue Department, would also investigate.

There appears to be serious misconduct by some dealers so I hope some MBIE action could be taken against them.

Dealers shouldn’t be fiddling their tax but the Deloitte report says that Bachop was sometimes paid in cash. This could be of interest to Inland Revenue.

Inland Revenue should also be interested in multiple cars sold to private individuals and family groups, who would appear to have been effectively dealing.

The one councillor tried to get Bachop investigated in 2011 and is still trying to get some accountability, Lee Vandervis, has been said by Cull to have “zero credibility”.

Dunedin City Councillor Lee Vandervis said he tried to blow the whistle on the scam years ago.

“Most of the issues in the Deloitte report had been known about for many years. Certainly as far back as 2011 and nothing was done about it.”

Councillor Jinty MacTavish, said to be close to Cull, posted on Facebook:

I’m glad this report has been released this year. I want to head into 2015 with this behind us, getting on with the job of continually improving our processes and doing our darndest to deliver good outcomes for our great wee city.

MacTavish and Cull should be doing their darndest to represent the interests of ratepayers, not trying to sweep this away with the closing year.

Releasing the Deloitte report right before Christmas is a classic sign of trying to bury bad news hoping people will have forgotten about it after the holidays.

The police report on it is due to be released early next year. That will only be as effective as the information supplied by the Council and whether the Council makes any complaints.

But Cull seems to have made up his own mind already. Radio NZ: Council under fire after fraud report

Dunedin Mayor Dave Cull said the only employee involved in the fraud was Mr Bachop.

“Deloitte have concluded that there was no other staff member that benefited financially from the fraud,” he said.

“There were control failures and responsibilities but it was clear there was only one perpetrator in the council.”

That sounds like wilful sweeping under the carpet. I don’t know if anyone else in council was involved, but this doesn’t give me any confidence that it has been investigated properly.

Dunedin’s Mayor Cull misrepresents fraud report

In response to the damning Deloitte report detailing a possible $1.5 million fraud (for as far back as was decided to investigate) Mayor Cull has made some very questionable statements.

On Radio NZ (Council under fire after fraud report) Cull says:

“Deloitte have concluded that there was no other staff member that benefited financially from the fraud.

“There were control failures and responsibilities but it was clear there was only one perpetrator in the council.”

That’s not what the Deloitte report concludes at all. Under Were other Council staff involved?


Cull is wrong on a number of counts.

  • Finding no evidence is quite different to “concluded that there was no other staff member that benefited financially”.
  • Obtaining vehicles at a discount to wholesale market value is a financial advantage.
  • Deloitte said that the police “may be interested” in staff members who paid for vehicles that the Council received no proceeds or was paid materially less than market value.

Some of the staff members at least will have known they were getting a bargain at the expense of the ratepayers. And paying Bachop rather than the council, especially in cash, was imprudent at best.

And there is major redaction of details.

In addition under Limitations the Deloitte reports says:

2.14 There is an inherent risk there are other material frauds at Council not identified in this investigation.

For Cull to put all the blame on one dead person and claim the report concluded no one else in Council benefited, when the report went as far as saying the police may be interested in staff members involved, gives me no confidence at all that the Mayor of Dunedin takes this seriously enough.

He seems more intent on sweeping embarrassments under the carpet.

His serious misrepresentation of the Deloitte report gives the impression he could be seriously misrepresenting the interests of the city’s ratepayers.

Dunedin Citifleece report confirms gobsmacking laxity

The Deloitte report on the vehicle 9and other) fraud at Dunedin City Council confirms a gobsmacking laxity in the council financial systems and staffing oversight.

$1.5 million of taxpayers money stolen. Perhaps significantly more – they say it’s too hard to check the full extent.

Questions have been asked for years about questionable practices, and they were fobbed off. The council was beyond reproach.

It is hard to get a resource consent from the council. They have a well known reputation for stifling business development, and proposals to rezone land struggle against intransigent bureaucrats. Talk of fiefdoms and agendas within the council are common.

But when it came to systems and oversight within the council was unforgivably lax.

The blame is all being aimed at one person, the ‘Citifleet Team Leader” (perhaps that should be Citifleece) Brent Bachop, who died suddenly just days after being confronted. No suspicious circumstances regarding his death, many suspicious circumstances regarding his dealings within the DCC.

DCCDeloiite1Well over a hundred vehicles still on the Council asset register had been sold over the previous ten years. Too a variety of people who knew they were getting a bargain, and many of home paid cash or check directly to Bachop or paid into his own bank account.

This fraud didn’t happen without a willing market, at the very least.

DCCDeloitte2A number of gobsmacking control failings allowed Bachop to get away with this. And that’s just the vehicles. Able to sell over a hundred vehicles (the ‘high risk’ number was 152) without anyone else noticing anything wrong with the asset register. Over a ten year period.

And that wasn’t all.

Use of an unrestricted fuel card to purchase personal items including soft drinks, packets of chips, milk, chocolate biscuits,  bread and petrol for personal use – $102,908.

He bought a trail bike for $7,333.33 with council money that never appeared on the asset register and was never registered as owned by the council.

Cash withdrawals for topping up car park pay stations – $104,800 unaccounted for.

An un-named person was given a parking ticket in 2007 using a Council vehicle. Reported and no known follow up. Staff regularly observed person in Council vehicles during Council work hours. Person had use of Council car for the six months up until discovery of the fraud in May, and petrol and $3020 of repairs were paid by council in that period.

The openness of some of the abuses are as gobsmacking as the lack of systems, oversight or checking the many ‘red flags’.

As a Dunedin ratepayer throughout this period I’m appalled.

A number of changes have taken place and we have been assured that nothing like this will happen again. But no one has yet been held to account.

A dead man looks like being responsible in a big way. But he was allowed to get away with it by many others.

DCC: Deloitte Report Released

Redacted report: www.dunedin.govt.nz/deloittereport

Radio NZ:

ODT: $1.5m fraud: ‘Red flags were ignored’

ODT: Fraud: Weak council culture cited

ODT: Bachop at ‘centre of’ other issues

ODT editorial: DCC fraud: a salutary lesson

ODT Councillors waffle: Findings disappoint most councillors

What if? Dunedin: Vandervis: Deloitte and Police Citifleet investigations

Received from (councillor) Lee Vandervis
Fri, 19 Dec 2014 at 11:54 a.m.

Deloitte and Police Citifleet Investigations – information I believe should be public in the public interest.

What if? Dunedin: DCC: Deloitte report released on Citifleet #whitewash

I knew Brent personally and was shattered when he [died]. Whilst I am disappointed he was clearly guilty I cannot believe he was the only person involved. His death seems to be the opportunity for Council to draw a line under this matter and move on. One wonders what would have happened had Brent been held to account in a court of law. It is hard to believe that a few Council employees and purchasers of these vehicles would not have gone down with him. From what I am reading the whole fraud was committed by Brent and basically no-one else knew a thing about it. Even the most naïve of us knows that cannot be true. It is clear that if you were in the know and wanted a cheap car, Brent was the man to talk to. In conclusion, spare a thought for Brent’s family, his wife, his children, his parents. For them this nightmare goes on, they have lost Brent and yet the pain, grief and search for answers to why continues.

Radio NZ: Council under fire after fraud report

Dunedin Mayor Dave Cull said the only employee involved in the fraud was Mr Bachop.

“Deloitte have concluded that there was no other staff member that benefited financially from the fraud,” he said.

“There were control failures and responsibilities but it was clear there was only one perpetrator in the council.”

Deloiittes didn’t establish that at all.

Deloitte also found severe failings at the city council over the 11-year period, saying a number of aspects of the council’s culture allowed long-term fraud.

It said the processes for accounting for and monitoring fixed assets were severely deficient and there was little oversight of Mr Bachop.

Mr Cull admitted there were serious failings.

“Deloitte’s review has identified control failures – lamentable ones, appalling ones – and anything that was detected, anything any of those control failures that were identified are either being dealt with or have been dealt with now.”

Dunedin City Councillor Lee Vandervis said he tried to blow the whistle on the scam years ago.

“Most of the issues in the Deloitte report had been known about for many years. Certainly as far back as 2011 and nothing was done about it.”