Canada Golf with vendors, free booze and stolen tools: 5 takeaways from Hamilton's annual fraud report

19:56  24 november  2021
19:56  24 november  2021 Source:   cbc.ca

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Hamilton's annual fraud and waste report outlines 80 tips it received between July 1, 2020 and June 30, 2021 alleging fraud, waste and mismanagement. © Adam Carter/CBC Hamilton's annual fraud and waste report outlines 80 tips it received between July 1, 2020 and June 30, 2021 alleging fraud, waste and mismanagement.

Fraternizing on the golf course, free booze for a Christmas party and international trips with city vendors are among the incidents of waste and mismanagement that resulted in a loss of $235,000 for the City of Hamilton last year, according to a new report.

The findings of the Annual Report of Fraud and Waste where presented to the audit, finance and administration committee by city auditor Charles Brown on Thursday.

It detailed 80 complaints his office received between July 1, 2020 and June 30, 2021, 32 per cent of which were substantiated.

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Here's a look at five takeaways from the report:

Eight employees terminated

The report outlines that, following investigations, eight city employees were fired.

One other employee received disciplinary action, it adds, and five others corrective actions, including meetings, letters to lawyers and letters outlining expectations.

A total of $235,000 in loss or waste was substantiated since last year's report. Of that, $5,000 has been recovered.

A breakdown of that provided by Brown shows $300 of that was in losses and the rest —$4,700— in restitution.

The city's fraud and waste hotline was set up in 2019.

It received 85 reports that year, slightly higher than the 80 fielded this time around.

The report also notes that since the hotline was launched, $439,000 in actual and potential losses were investigated and $26,000 has been recovered.

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Socializing with vendors proves expensive

An investigation that started with a public complaint about two city employees playing golf with a vendor during business hours resulted in the Office of the City Auditor (OCA) uncovering an estimated $233,00 in waste and mismanagement.

The staffers were reportedly golfing with a vendor vying for a city request for proposal (RFP) that was worth roughly $2 million over three years, according to Brown's report.

The auditor wrote that his team found "evidence of more widespread socializing with a range of vendors."

That included accepting hospitality and gifts, and instances of "time theft." One employee even wrote a reference letter for the firm they were golfing with and evaluated their bid for the RFP as part of the committee created to choose the successful vendor, said the report.

Another employee was found to have taken five international trips with vendors, including one where they were a representative of the city, without seeking authorization or letting their superiors know because the travel happened during their vacation time, the report said.

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Finally, the OCA investigation found the vendors were "sponsoring" the team's Christmas party by paying for their drinks.

In the end, three employees were fired.

Parking passes, database used inappropriately

Two city employees were also let go following an OCA probe that uncovered "fraudulent" use of parking passes.

The report also revealed allegations that a city worker used a confidential database to further an "outside business interest."

That report was confirmed, wrote Brown, and the employee no longer works for the city.

A separate incident was launched into allegations a city employee arranged to have work done on the sidewalk and curbs in front of their home — using city crews and at the city's expense.

Concerns were raised by another city worker who arrived at the site, questioned the "propriety of the situation" and halted the process, according to the report.

The OCA substantiated that the work was "unnecessary" and shared its findings with management for disciplinary action.

Employee charged in alleged theft

The OCA was alerted about allegations that tools and other small equipment at a city yard was being misappropriated.

Police became involved, found inventory with a value under $1,500 had been stolen, and a city employee was charged, the report said.

Following the investigation, the OCA carried out an audit of the tool and equipment inventory process for the roadway maintenance department, which resulted in 21 recommendations supplied to the committee.

Worker fired after 'bad faith' report

Another employee was fired after filing an anonymous report alleging a colleague was abusing the city's sick time policy.

Brown's report states that the worker provided documentation, but it was found to be inadequate.

The OCA worked with human resources and found the tipster was actually another city worker who had "engaged in a wide range of inappropriate behaviours, including the filing of this vexatious complaint against the innocent employee for their own personal reasons.."

In the end, the worker was let go.

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