City Auditor releases second Fraud and Waste Annual Report

HAMILTON, ON – Today, City Auditor Charles Brown presented the City of Hamilton’s second Fraud and Waste Annual Report. A total of 80 reports were received and assessed by the Office of the City Auditor (OCA) between July 1, 2020 and June 30, 2021.

The Fraud and Waste Hotline provides City employees, contractors, vendors and members of the public with a convenient, confidential and anonymous way to report suspicion or proof of wrongdoing. It also enables the City to operate with a high level of honesty and integrity.

Among the results from the investigations in this report there were:

• Eight terminations
• One disciplinary action
• Five other actions (includes employee letter of counsel, letter of expectations, meeting held and outcome pending)

The Fraud and Waste Hotline was established to help protect City assets and reduce losses. As of September 30, 2021, the amount of confirmed loss or waste substantiated by the OCA was $235,000. Of this amount, $2,000 was fraud, $233,000 was waste. Also, as of September 30, 2021, the City has recovered $300 of losses and received $4,700 in restitution.

Additionally, the Fraud and Waste Hotline provides the following benefits that cannot be quantified:

• Deters fraud, waste and wrongdoing
• Strengthens internal controls and mitigates risks
• Improves policies and standard operating procedures
• Increases operational efficiencies by providing better value in service delivery
• Uses hotline report data to identify trends, manage risks, make results-oriented recommendations to management and inform future audits for the OCA work plan

“The number of reports related to fraud and waste continues to exceed expectations, highlighting that the Hotline remains a well used and valuable tool fostering the City’s commitment to being transparent and accountable. Based on the findings of this Report and subsequent recommendations, it is clear that as a City, there is work to do in properly dealing with and improving our response to conflict of interest situations that arise.” -  Charles Brown, City Auditor & Auditor General, Office of the City Auditor

Quick facts

Fraud and Waste Report findings from July 1, 2020 through June 30, 2021 include:

• 80 reports received (165 reports total since the hotline launch in July 2019)
• 23 reports directly received by the OCA
• 59 per cent of reporters self-identified as an employee
• 32 per cent substantiation rate of reports received
• 24 investigations launched by OCA
  • 1 investigation related to fraud
  • 13 investigations related to waste/management
  • 8 investigations combined fraud and waste/management
  • 2 investigations related to whistleblower

Additional resources

• Fraud and Waste Annual Report (July 1, 2020 to June 30, 2021)
• Fraud and Waste Annual Report Infographic
• www.hamilton.ca/Fraud