Councillor Faces Allegations After Invoice Alteration in 2018

A councillor in Central Otago has come under scrutiny following allegations of misconduct related to an invoice alteration involving DM Property Solutions Ltd. The accusations have resurfaced as Dave McKenzie, who was elected as the councillor for the Vincent ward, faces claims tied to a 2018 incident where an invoice was inflated by $1,000.

Legal advice released by the Central Otago District Council indicates that the council and police had previously classified the matter as civil rather than criminal. Documents reveal that further legal counsel cautioned against engaging a forensic accountant, citing potential costs exceeding any amount that might be recovered.

The allegations gained public attention after Rachel Kerr, the widow of the council’s former property and facilities manager Mike Kerr, made a social media post on March 10, 2024, asserting that McKenzie had altered invoices for personal benefit. In response, McKenzie issued a public statement acknowledging past mistakes while emphasizing that he believes there was fault on both sides, and he plans to serve as a councillor.

A report presented to the council’s Audit and Risk Committee in March 2019 indicated that DM Property Solutions’ contract was terminated after it was discovered that subcontractor repairs for Cromwell Hall had been tampered with. The report, authored by then planning and environment executive manager Louise van der Voort, stated, “Council staff met with the owner of DM Properties to discuss the matter. He admitted altering the subcontractor invoice to match the claim by adding $1,000.”

Subsequent audits revealed a troubling pattern: out of 17 subcontractor invoices submitted by DM Properties, 14—approximately 82%—were found to have been altered. The report detailed that while the total value of the subcontractor invoices was $4,754.08, the council was charged $6,464.06, resulting in an excess charge of $1,709.98 or 35.9%.

In legal advice provided to the council in October 2018, Anderson Lloyd associate Jenna Riddle described the situation as a “murky contractual position,” suggesting that the additional charges did not meet the criminal threshold for fraud. Riddle noted that the lack of a formal contract document complicated the possibility of a successful breach of contract claim.

She remarked, “In our opinion, CODC should have sufficient evidence of criminal intent and criminal action before reporting this matter to the police in good faith,” adding that pursuing a forensic audit would not be an efficient use of ratepayer funds in the absence of clear evidence.

The report concluded that unless the committee decided otherwise, the matter was considered resolved. Van der Voort, who resigned from her council position earlier this year, also ran for election in the Vincent ward and was the next highest-polling candidate after McKenzie.

In a statement accompanying the release of the legal documents, council chief executive Peter Kelly mentioned that after the 2019 report, no further actions were taken. He highlighted that procurement processes have since improved, stating, “A procurement audit was carried out in 2022 that had further strengthened policies and processes. These improvements would help lessen misunderstandings between council and its contractors.”

On March 11, Kelly confirmed that a “thorough review” of the 2018 investigation is currently underway, and the findings will be shared with the public.