City fraud and waste audit reveals multiple issues, Councillors decide to make tip hotline permanent

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The City of Hamilton started its Fraud and Waste Hotline as a three-year pilot program in 2019. 


A recently released City of Hamilton annual “Fraud and Waste Report” from the Office of the City Auditor revealed major conflicts of interest and waste involving the city.

Among the major investigations detailed in the report is a case in which a city manager had close relatives working for two companies that received a combined $95 million in city business. The manager no longer works for the city.

While employees are required to disclose familial ties with vendors, the report says that the manager only made that disclosure after the auditor’s office began investigating.

The auditor’s report reads that “the disclosure was completed years later than it should have been and the mitigation plan proposed by the manager was found to be wholly inadequate.”

The other major investigation involved a senior staffer who had a “significant social relationship” with two different vendors that were given “favourable treatment.” That staffer is also no longer working for the city.

The report does not name either staffer or the involved parties due to privacy.

Other incidents include 18 city-issued iPads having gone missing. Four iPads were recovered. 

There was also a city vendor that returned DARTS bus vehicles to the city without the proper repairs.

Between July 2021 and June 2022, the City Auditor received 107 reports, the highest annual number to date. A total of 33 reports were considered substantiated.

The Auditor’s Office says that 42 reports were made directly to them, with the other 65 received by the City’s Fraud and Waste Hotline. The hotline was started as a three-year pilot program that ran from July 2019 until July 2022 and has been considered very effective.

With the help of the hotline, the city was able to estimate losses at about $1.16 million and recover $33,300. Reports through the hotline have resulted in various disciplinary actions.

City Council decided just last week to make the hotline program permanent. Approval was given last Wednesday, March 29.

According to the city, the hotline “provides City of Hamilton employees, contractors, vendors and members of the public with a convenient, confidential and anonymous way to report any observed or suspected fraud, waste and wrongdoing involving City resources.”

It is meant to “help protect City assets and reduce losses”.

In addition, Council voted to change the name of the “Office of the City Auditor” to the “Office of the Auditor General”, in a move meant to emphasise that the office operates independent of the city.


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