Kaipara District Council says no harm has come from an error that gave an ex-employee cheque signing authority for the council's bank account, long after she'd resigned.
The council admits it forgot to cancel the bank authority for former planning manager Vanessa Annich in 2009, describing it as an administrative oversight.
Ms Annich left to work for the council's planning consultants after she became romantically involved with council chief executive Jack McKerchar.
Deputy mayor Julie Geange says forgetting to cancel the bank authority was a simple oversight, and there is no question of any wrongdoing.
Mangawhai Ratepayers chair Bruce Rogan says she continued as a signatory to the council's bank accounts, until June 2011.
Mr Rogan says that is unacceptable, when she had not only left the council, but was living with the chief executive.
The council is about to be replaced by commissioners, after a community uproar over its debt levels and financial management.