ALLEGED fraud at Gosport Borough Council could run into hundreds of thousands of pounds, The News has learned.
Figures have not previously been revealed but a report from the Audit Commission into the council’s finances says £146,263 was identified as fraudulent in the last year alone.
And The News understands the total figure could be around £300,000.
The auditor’s report said: ‘During the year the council suffered an internal fraud identified in July 2011 which is currently under investigation.
‘Management are pursuing an insurance claim and anticipate no loss to the council.
‘I am satisfied that management has responded promptly and properly.’
During the annual audit of the council’s finances, the Audit Commission drew attention to fraudulent entries in the accounts.
Expenditure of £146,263 during the last financial year was identified as being fraudulent and had to be corrected in the council’s records.
An alleged fraud was reported by a council manager in July.
Gosport’s internal audit team then identified an apparent cause and contacted police.
A 35-year-old man – a former council officer – was arrested on August 30 on suspicion of fraud.
The precise value of the alleged fraud in his case has not been made public by the council or police.
He has been rebailed by police until tomorrow.
The council has said it expects to recover from its insurers any money which may later be found to be fraudulent.
After a meeting of the council’s policy and organisation board last Wednesday night, councillors held a briefing session behind closed doors to discuss the alleged fraud.
Independent councillor Dave Smith attended the meeting. He said councillors were not allowed to speak about the issue, otherwise they could be suspended.
The council’s Tory leader, Cllr Mark Hook, said: ‘At this stage we don’t want to jeopardise the police investigation.
‘I have kept group leaders fully informed of the situation.’