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The Serious Fraud Office is investigating the Far North District Council.
The investigation comes after Far North Mayor John Carter and councillors commissioned an independent consultant to look into council activities late last year, the Kaikohe-based council said in a statement.
"The investigation was referred to the SFO who confirmed last week that it will conduct a formal investigation into the council," according to the statement.
Carter said the council is cooperating fully with the SFO and would not comment further.