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New financial protections in place after fraud, Saskatoon city committee hears 

Jorgenson says the city's financial protections "are much more resilient" after investigations into the city being defrauded $1.04 million.
Jorgenson says the city's financial protections "are much more resilient" after investigations into the city being defrauded $1.04 million. Nathaniel Dove / Global News

Saskatoon City manager Jeff Jorgenson says new financial protections will make the city much more resilient after it was defrauded of over $1 million in August.

Jorgenson spoke to the governance and priorities committee Monday afternoon at city hall as he presented administration’s report about the fraud. It found a lack of procedure and guidelines caused the city to be defrauded.

He said new financial controls “surpass industry standards” but did not say much else about them during the portion of the meeting that was open to the public.

READ MORE: Saskatoon city hall suffered $1M fraud due to procedural failure: report

“To get into any more detail about the exact nature of the controls wouldn’t be responsible,” he said afterwards. “You wouldn’t want to talk about those particulars because it would give too much information to the people who might be trying to defraud you.”

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On Aug. 12, city officials realized they had transferred $1.04 million into the account of someone impersonating the chief financial officer (CFO) of Allan Construction. The impersonator stole the CFO’s identity and then asked the city administration for payment with altered banking information. The funds were sent to a different account.

“The real question I think is ‘why weren’t there controls in place to mitigate or to stop that from happening?’” Jorgenson said.

Allan Construction is the contractor for the rehabilitation of the Sid Buckwold Bridge.

READ MORE: Saskatoon recovers remaining money fraudulently obtained from the city

The committee heard that legal costs connected to recovering the money are estimated to be nearly $100,000. How the fees will be paid has yet to be determined.

“We’ll have to talk with our [chief financial officer] about that. It’ll have to come from a reserve or a project somewhere,” Jorgenson said.

All of the money has been located and frozen in about a dozen accounts. A judge has ordered the money be returned to the city and those who own the accounts have until Dec. 23 to appeal the decision.

Jorgenson said he doesn’t expect the courts to uphold any appeal.

The court previously awarded the city $25,000 for court costs.