LABOUR has launched an investigation into its Edinburgh Eastern constituency party after almost £10,000 went missing from the accounts.
Treasurer Karen Rennie has been suspended from the party while the inquiry is carried out.
Labour Party headquarters promised “appropriate action” once the investigation was completed.
The hole in the accounts was discovered after the local party’s annual general meeting, due at the end of May, had to be postponed because Ms Rennie asked for more time to finalise the accounts.
When they were still not ready on the rearranged date at the end of June, other senior figures in the party examined the books and found “the cheque stubs didn’t tally with the accounts”.
The shortfall in the accounts is said to represent more than half the local party’s funds.
One senior member said: “All that money is the result of local people fundraising, so it arguably has a value beyond the mere cash amount.”
Ms Rennie, who is in her fifties and is an official with Unite the union, lives in Portobello and has been treasurer in Edinburgh Eastern for the past two years.
City Centre councillor Karen Doran, said to be a close friend of Ms Rennie, was appointed acting treasurer in her place.
Activists told the Evening News there had long been a lack of information about the local party’s finances.
One said: “For some time now there has been no written financial report at constituency meetings.”
Paul Nolan, a former chairman of the Edinburgh East party, said: “There has been a serious lack of financial oversight If there had been regular financial reports this would have been picked up.”
But another senior figure in the local party said there had been fully audited accounts at the last AGM and the fact the discrepancies had now been uncovered showed the process worked.
Former council leader Ewan Aitken stood down as chair of the constituency party at the AGM because of his new job as chief executive of Edinburgh Cyernians and was replaced by Teresa McDowell, who was previously secretary.
A Scottish Labour spokesman said: “Issues raised by party members about the finances at Edinburgh Eastern CLP are currently being investigated by officials at the Scottish Labour Party and appropriate action will be taken when this process is completed.
“Pending this investigation, a local party office bearer has been suspended.”
Police have not so far been involved.