Hamilton’s auditor says approximately three-dozen cases of fraud, waste or wrongdoing tied to City of Hamilton employees and contractors cost some $700,000 in losses in 2022.
The latest annual fraud and waste report, as presented by city auditor Charles Brown, says his office was able to substantiate 32 per cent of 107 allegations received through a dedicated, confidential hotline from July 2021 through June 2022.
Two employees were fired as a result of the investigations, while four others left through retirement or resignation.
“The highest volume, besides multiple types, are in social services fraud, time theft or misconduct and conflicts of interest,” said Brown, who presented his report to Hamilton’s audit, finance and administration committee on Thursday morning.
Almost two-thirds of the allegations were reported to the hotline by other employees.
Brown revealed that some $200,000 was found to be missing during a year-end inventory count in one case, while a community group that leased a city facility for a nominal fee was sub-leasing portions of the facility to tenants at a profit.
Meanwhile, another investigation discovered 18 iPads were missing after a resident purchased a device on Facebook Marketplace, which displayed City of Hamilton credentials when powered up.
“We had an investigation of stolen iPads that led us to initiate an audit of mobile asset security,” Brown told councillors.
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“That audit was delivered last year and had eight recommendations for improvement.”
In another occurence, a member of city management allegedly had a significant social relationship with two vendors that were favoured in how they were being selected for contract work.
“The contractors, whose work and performance was overseen by the manager, who was in a position to accept, reject or penalize the deliverables,” Brown revealed.
The city’s fraud and waste hotline was established via a pilot in 2019. To date, about $1.16 million in potential losses tied to the dollar figure have been investigated.
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As of Dec. 31, 2022, the annual combined fraud and waste losses were $718,000.
About $8,600 was attributed to fraud, $709,400 was waste.
The city has recovered approximately $5,300 in losses and approximately $2,000 in city assets since the last report was issued.
The 107 tips reported to the Office of the City Auditor between July 1, 2021 and June 30, 2022 is the highest number received to date.
Following Brown’s presentation, Stoney Creek Coun. Brad Clark said he was “pleased” with the updated audit process, particularly the hotline, which he characterized as “exceeding expectations.”
“We’re clearly seeing that our staff are watching other employees and where they do think there’s an issue, they do notify the auditor,” Clark said.
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