An investigation is under way into suspected financial discrepancies at the offices of Masterton District Council, says chief executive Wes ten Hove.
Mr ten Hove said that earlier this year an internal audit brought to light the discrepancies, which involved a former staff member who had left the job.
"The fact that we needed to investigate something came to my attention in August," Mr ten Hove said.
He said council investigations were ongoing and police had become involved, although "we haven't given them a lot of detail yet because that's all part of the investigation".
Mr ten Hove would not say how much money was involved but said there was currently nothing outstanding.
"Obviously it's a sensitive matter in terms of all the different interests and processes, and that's what I need to manage," he said.
"We now have to let the investigations and the processes run their course. When the facts are known, they can be discussed."
Mr ten Hove said a specific complaint was yet to be made to police, who would decide on whether to lay any related charges.
Senior Sergeant Carolyn Watson of Masterton police could not confirm whether officers were investigating.
She said people who reported similar matters were often advised to "collate all the information they can" before handing the case over to police investigators.