A number of people have approached The Advocate with information saying that staff members had sold up to three loads of woodchips a day, at $50 a load, over certain periods.

In an email sent to The Advocate last week, chief executive officer Kaylene Conrick said "management has just become aware of a potential fraud and a full investigation is being carried out".

"Once that investigation has been completed and the extent of any fraud determined a decision will be made on action in relation to any council employees involved," Ms Conrick said.

"In the meantime, council's audit committee and councillors have been advised of the investigation and will be kept updated.

"We consider it inappropriate to disclose any further details at this stage as information in the public domain could possibly prejudice our investigations and at this stage nothing has been conclusively proved."