How does a Council lose a few dozen cars?

June 28th, 2014 at 7:00 am by David Farrar

The Herald reports:

An investigation into irregularities within the ’s Citifleet and Citipark departments is examining the disappearance of dozens of council vehicles, it has been confirmed.

The Otago Daily Times has learnt the probe was looking into claims a significant number of vehicles – possibly approaching 100 – had been sold, and some of the proceeds pocketed, over the past decade.

The council was said to have 205 vehicles, together worth about $1.9 million, in 2011, but there is confusion about how many were sold, and how many replaced, since as far back as 2001, the ODT understands.

The council was understood to have found a sizeable discrepancy between the number of vehicles bought and sold, and the number still owned by the organisation, after examining its records earlier this year.

This should not be able to occur. Checking assets against the fixed asset schedule should be part of the annual audit. There is a serious problem with their controls, if they can lose perhaps a few dozen cars and not notice!

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29 Responses to “How does a Council lose a few dozen cars?”

  1. slightlyrighty (2,475 comments) says:

    I think they parked on Baldwin Street and left the handbrake off.

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  2. Pete George (23,567 comments) says:

    Maybe it’s part of their plan to make everyone use bikes.

    The investigation by independent financial consultant Deloitte was launched after the council’s Citipark and Citifleet team leader, Brent Bachop, died suddenly on May 21.

    Mr Bachop’s death has since been referred to the coroner, and most of those contacted yesterday would not comment publicly while the investigation continued.

    That it was only discovered after the death of the ‘team leader’ looks scandalous – for the fact that apparently many vehicles have disappeared but also that council systems have allowed it to go un-noticed until now.

    This is a very poor look for the council.

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  3. Other_Andy (2,676 comments) says:

    The mayor of the biggest city in New Zealand, lies through his teeth, commits electoral fraud and has sex in his office with an employee without any real consequences and you ask how a council can ‘lose’ a few cars?
    You must be joking….

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  4. Harriet (4,972 comments) says:

    About 10 a year.

    It’s strange that it’s over 10 yrs as things like this often get picked up by accounts managers or auditors in the first couple of years as ownership of sizable assets is a regular tax matter.

    Bought and not leased raises questions – that’s where I’d start looking as most councils I’d think would lease – due to volume.

    Coupled with the tax aspect of depreciation on owned vehicals, cars would then becoming up about every 4-5 years for a cheap ‘cash sale’ which is then usually put in the books – strange then that’s also missing. Also, some businesses sell these cars to staff as they know the vehical and that they have also been serviced.

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  5. nasska (11,525 comments) says:

    What’s important about a few cars to an organisation that can set its income according to its expenditure?

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  6. mjw (396 comments) says:

    It is tempting to blame this on incompetent council bureaucracy (I’m tempted!) but a garden variety fraud seems a fairly likely alternative explanation.

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  7. kowtow (8,487 comments) says:

    It’s only rate payers’ money so………

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  8. Pete George (23,567 comments) says:

    “Died suddenly”, “referred to the coroner” makes one wonder a bit.

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  9. peterwn (3,273 comments) says:

    mjw – agreed. To avoid fraud/ corruption an organisation like a council should always either put old vehicles up for public tender or send them to Turners for auction – no if’s or buts. Incidentially it does pay a moderate size fleet user to turn vehicles over each four years or so, since they can access fleet discounts and can get a good price for them after four years.

    Council controls must have been zilch. Like with the two old geezers who stole heaps of parking meter money in Wellington years ago. No one in Council seemed to have a clue how much the parking meters were actually ‘taking’ or supposed to be ‘taking’.

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  10. Simon (724 comments) says:

    Clearly the council didnt need the 100 cars in the first place as they were not missed over the time period. There is your real fraud extreme govt waste. The criminals selling the cars is an example of learned behavior.

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  11. Simon (724 comments) says:

    If council employees have committed occupational fraud they should get suspended sentences as the offending is directly related to the environment they had to work in.

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  12. Steve (North Shore) (4,563 comments) says:

    How many were stolen to order, or stolen for parts and the cash trousered; and then insurance claimed?

    How bizzaar, stole my car

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  13. holysheet (391 comments) says:

    It begs the question;

    If they can loose a few cars, and no one noticed, what else has gone missing?

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  14. igm (1,413 comments) says:

    Appears the type of f/up Parker would organise.

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  15. Reid (16,471 comments) says:

    “Died suddenly”, “referred to the coroner” makes one wonder a bit.

    Plus the fact the investigation was launched soon after.

    Who knows. Bit early to draw conclusions, of any kind.

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  16. flipper (4,067 comments) says:

    It is all part of the gween (with acks to someone) policy to eliminate motor vehicles in Dunedin.

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  17. SGA (1,039 comments) says:

    Perhaps the council gave Michael Swann a job?
    http://www.kiwiblog.co.nz/2013/10/the_unrepentant_michael_swann.html

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  18. SGA (1,039 comments) says:

    Other_Andy at 7:32 am

    The mayor of the biggest city in New Zealand, lies through his teeth, commits electoral fraud and has sex in his office with an employee without any real consequences and you ask how a council can ‘lose’ a few cars?
    You must be joking….

    Auckland had to scrap all the old council cars – back seats were a mess.

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  19. duggledog (1,558 comments) says:

    How did they lose them?

    Same reason NZ Rail famously lost a farmer’s tractor he had ordered, back in the good old days. He had to go and find it himself.

    Ineptitude

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  20. dog_eat_dog (781 comments) says:

    Sorry, legit Q here, but how did Len Brown commit electoral fraud?

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  21. Other_Andy (2,676 comments) says:

    dog_eat_dog says:

    “Sorry, legit Q here, but how did Len Brown commit electoral fraud?”

    Brown took deliberate steps to hide the source of election donations, in contravention of local government electoral law.
    But although Brown (Unlike Banks) did it with trusts which were at the time legal, that does not make it okay to try and hide the source of donations that he knew were not anonymous.

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  22. WineOh (630 comments) says:

    Two main possibilities:
    1. Piss poor record keeping- when vehicles were replaced or disposed of they were not removed from the asset register. Points to severe mismanagement.
    2. Pre-meditated fraud – council staff have arranged the sale or disposal of vehicles for personal gain

    Either way, for it to have gone on for 10 years speaks of appalling financial management and oversight. Basic audit of the asset register surely someone would have identified that HALF of the vehicle fleet weren’t around. How were the basic services being delivered??

    Here is the Stuff article from the day before: http://www.stuff.co.nz/national/10203326/Too-soon-for-police-to-join-fleet-probe

    Death referred to the coronor rather than the police implies suicide to me. This should be front page news.

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  23. jcuknz (704 comments) says:

    Whats a few cars compared to the Stadium bill …. GHU!
    Still thats the rugby religion for you.

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  24. maxwell (55 comments) says:

    This is a Council that paid PWC $65,000 to do an audit to find out how much the Stadium actually cost.

    Estimated to be 250 million, more than $400 million when/if paid off, depending on interest rates, and currently
    costing 53,000 ratepayers $23 million a year

    http://dunedinstadium.wordpress.com/2014/06/27/stadium-costs-23-4144-million-per-annum/

    This is also a Council that for most of last decade instructed it’s CCO’s ( 100% Council Owned Co.s) to borrow money to pay the council higher dividends to keep rate increases at only 3-4 times the rate of inflation.

    Things are improving – that stupid practice has been stopped and rate increases are now only twice the rate of inflation – but total Council debt has gone from around $90 mill to about $660 million since 1999.
    The DCC has an appalling record of poor budgeting and overspending on big projects.

    Even though they are above the Councils self imposed limits the debt levels are justified using debt to asset ratios.

    That requires heroic assumptions about the values of those assets, e.g. no one would pay $250 million for the stadium, it’s a liability that you wouldn’t want if someone gave it to you, but it’s on the books as an asset we can borrow against. The ratepayers are very exposed to rises in interest rates.

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  25. lazza (381 comments) says:

    Dunedin City scores poorly on LG League Tables. Any wonder ….?

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  26. backster (2,172 comments) says:

    I wonder how many other Councils likewise can’t account for all the vehicles they have purchased and if they are taking steps to find out or are choosing to remain blissfully ignorant. Still when the Greens control Government the problem will either disappear or there will be a disturbing loss of bicycles.

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  27. muggins (3,787 comments) says:

    Unbelievable. There should be an asset register with all Council owned cars in a separate section. This register should be checked every 6 months or so and every car on it sighted if possible or at least a check should be carried out as to who is driving it so that person can be contacted. Not difficult.
    At one time in my career I used to carry out a monthly check at certain dealerships for all new cars supplied by the franchise owner just to make sure all cars sold had been paid for by the dealership.

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  28. publicwatchdog (2,596 comments) says:

    By not implementing the Public Records Act 2005? Penny Bright

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  29. Tauhei Notts (1,714 comments) says:

    The Audit Office should write their report on the adequacy of Dunedin City Council’s accounting records, on toilet tissue.
    Then it could be merely flushed away.

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