City Auditor releases third Fraud and Waste Annual Report, highlights program success

HAMILTON, ON – The City Auditor presented the City of Hamilton’s third Fraud and Waste Annual Report today. A total of 107 reports were received and assessed by the Office of the City Auditor (OCA) between July 1, 2021 and June 30, 2022 – the highest number received to date.

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 two terminations and four other actions (includes employee resignations, retirement and process improvements implemented).

The Fraud and Waste Hotline was established to help protect City assets and reduce losses. As of December 31, 2022, the amount of confirmed loss or waste substantiated by the OCA was $718,000. Of this amount, $8,600 was fraud, $709,400 was waste. Also, as of December 31, 2022, the City has recovered approximately $5,300 of losses and approximately $2,000 in City assets since the last Annual Report was issued.

Additionally, the Fraud and Waste Hotline provides these 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

Since the Fraud and Waste Hotline pilot launched in July 2019, the cumulative total of actual and potential losses investigated is approximately $1.16 million with about $33,300 recovered via repayments/restitution/asset recovery.

Quick Facts

Fraud and Waste Report findings from July 1, 2021 through June 30, 2022 include:

• 107 reports received (272 reports total since the hotline launched in July 2019)
• 42 reports directly received by the OCA
• 64 per cent of reporters self-identified as an employee
• 32 per cent substantiation rate of reports received
• 22 investigations launched by OCA
  • 9 investigations related to waste/mismanagement
  • 3 investigations related to combined fraud and waste/mismanagement
  • 3 investigations related to whistleblower
  • 7 investigations in progress/pending