DCC: Forensics for kids

Fairfax Media has obtained Audit NZ letters of management to the DCC from 2005 to 2012, released under the Local Government Official Information and Meetings Act. The letters show that in the years 2007-2010 auditors consistently urged the DCC to tighten up its risk-management policies and processes.

Audit NZ expressed concern over what it indicated could be inadequate controls over several internal processes, including verifying signatures of those authorised to sign invoices and purchase orders, independent review of creditor files, and controls of sensitive areas such as sale of council assets to staff. (Fairfax)

### stuff.co.nz Last updated 08:17 26/08/2014
Dunedin council officers ‘not kids’
By Wilma McCorkindale
The Dunedin City Council (DCC) appears to have ignored calls by Audit New Zealand to improve its risk and fraud processes, saying its officers were “supposedly people with integrity … not kids”.

The DCC revealed in June it was investigating a suspected major fraud within its Citifleet unit. The fraud was suspected to have been carried out over a decade. Citifleet team leader Brent Bachop died suddenly in May. His death has been referred to the coroner. Council chief executive Dr Sue Bidrose said the alleged fraud of $1.5 million included alleged illegal transactions resulting in the loss of profits from the sale of 123 council fleet vehicles. The findings have been passed to the Dunedin police for further investigation.

Fairfax Media has obtained Audit NZ letters of management to the DCC from 2005 to 2012, released under the Local Government Official Information and Meetings Act. The letters show that in the years 2007-2010 auditors consistently urged the DCC to tighten up its risk-management policies and processes. It appears Audit NZ was compelled to repeat similar advice over the period and noted the DCC met only minimum requirements.

Council managers’ response to the Audit NZ findings in 2010 was to say the council had considered creating an audit and risk committee but concluded its finance and strategy committee adequately performed the role. In December 2010 Audit NZ raised the issue of reviews of areas “susceptible to fraud”, but management commented that specific audits in the “most sensitive areas” had found “no transactions of concern or deficiencies in controls”.
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Five council staff were involved in “employment processes”, with some facing the prospect of losing their jobs, the ODT understands.

[Irony] Local Government New Zealand president Lawrence Yule yesterday told the ODT the “mind-boggling” alleged fraud was the biggest involving a local authority he could recall.

### ODT Online Tue, 26 Aug 2014
Council overlooked audit advice
By Chris Morris
Dunedin Mayor Dave Cull concedes a chance to detect the alleged $1.5 million Citifleet fraud may have been missed, after the council twice overlooked advice from Audit New Zealand. The revelation came in Audit New Zealand’s annual reports to the council, obtained by the Otago Daily Times, which highlighted gaps in council processes dating back to 2003. […] The findings have triggered finger-pointing between past and present council staff, councillors and Audit NZ, but council chief executive Dr Sue Bidrose said responsibility for failing to detect the alleged fraud rested with the council.
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3.7.14 Stuff: Alleged vehicle fraud at DCC
1.7.14 DCC: Far-reaching fraud investigation Citifleet
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Posted by Elizabeth Kerr

*Images (tweaked by whatifdunedin): tmba.tv – Tim McGarvey: 3D forensic animation (TMBA Inc. Animation Studio, New York City); scottthornbury.wordpress.com – F is for forensics (illustration by Quentin Blake, from Broughton, G. (1968) Success With English. Harmondsworth: Penguin)