The city of Hamilton has more that 8,000 employees, all but 42 of whom were gainfully employed during the current COVID pandemic. But a report by the City’s Auditor-General indicates that a small number of city employees were also busy finding creative ways of gaming the system. The release of the Fraud and Waste Annual Report covers the 18 months ending in June this year, and its makes for interesting reading. The key to this report was the establishment of a Fraud and Waste Hotline which is available to whistleblowers at city hall but also available to members of the public or anybody else. The hotline is manned by an independent third party contractor to ensure complete confidentiality.
Since the hotline has been in use response has grown quickly. In the first half of 2019, 14 reports were received by the Office of the City Auditor. After the Fraud and Waste Hotline launched in July 2019, there were 52 reports submitted to the Office of the City. There were a total of 85 reports received in the first 12 months of the Fraud and Waste Hotline being operational.
In sharp contrast to Integrity Commissioner Investigations a significant percentage of the Fraud and Waste allegations were substantiated. As at September 22, 2020, the following disciplinary actions related to investigations had been confirmed by the Office of the City Auditor:
• 5 Terminations,
• 3 Disciplinary Actions,
• 2 Other (includes employee retirement)
As at September 22, 2020, the amount of confirmed loss or waste substantiated by the Office of the City Auditor was $202,000. Of this this amount, $100,000 was fraud, $45,000 was waste, and $57,000 was unable to be determined which category was most appropriate.
The report provided several specific examples of the kinds of scams it uncovered including:
- A customer service employee dealing in cash transactions pocketed about $4,000. The city got some of that money back.
- A manager responsible for issuing contracts for leadership coaching received $15,000 worth of free coaching from a successful supplier of leadership and coaching services.
- Money was stolen from a safe that had a sticky note posted beside it with the safe’s combination
- Someone impersonated a city employee in order to use phishing to divert $4,000 to their bank account.
- Supply inventory found to ne $52,000 short. $5,000 worth of copper thrown in a dumpster.
- Employee collecting long-term disability and full salary at the same time. Employee terminated but $55,000 lost.
- Director of a department participating in a job recruitment process in which their child was a candidate.
The full report can be found here.