Police have arrested three people as part of an investigation into allegations of fraud against one of Leeds City Council’s partner organisations.
Two men and a woman have been spoken to by detectives over “potentially fraudulent creditor payments” at the unnamed organisation.
It comes after the council passed information to West Yorkshire Police following its own internal probe.
Both the council and police have refused to disclose the identity of the organisation in question.
Acting Detective Inspector Marc Bowes said: “We began an investigation into allegations of fraud last year after information was passed to the police by Leeds City Council.
“Three people – a 51-year-old man from Harrogate, a 44-year-old man from York and a 50-year-old woman from York – have been arrested in connection with the investigation and are currently on police bail pending further enquiries.
“We are not in a position to give any further details about the nature of the allegations at this stage.”
The investigation is mentioned in a report that is to be discussed by members of the council’s corporate governance and audit committee at a meeting next week.
The report says the alleged fraud came to light following “proactive fraud exercises” by internal audit staff, which led to a detailed investigation.
“The identification of this issue prompted the need for a detailed audit investigation, the findings of which have been passed to the police,” according to the report.
As well as the police investigation, internal disciplinary procedures have been undertaken. The council is supporting the organisation to “ensure the continuation of day to day functions,” the report adds.
A council spokeswoman said: “There is currently an ongoing police investigation around this issue and therefore we cannot comment any further at this stage.”