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’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?

DCCDeloitte3

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.”