Fraud, waste cost Hamilton tax-payers over $1 million since 2019: report

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Published February 17, 2023 at 1:17 pm

city of hamilton city hall fraud waste hotline report auditor
Since Hamilton's Fraud and Waste Hotline was implemented in 2019, approximately 1.16 million tax-payer dollars have been lost.

Before launching the Fraud and Waste Hotline, the City of Hamilton would receive only a handful of reported complaints from staff and the public concerning potential fraud and waste of tax-payer dollars each year. In fact, the 12 complaints that the city received in 2018 was considered higher than usual.

Well, the hotline was introduced in 2019, and 134 complaints were received last year alone. Third-party auditors estimate that $718,000 of tax-payer money was wasted or defrauded in 2022. Since the hotline was implemented, the total is approximately $1.16 million, with about $33,300 being recovered via repayments, restitution, or asset recovery.

And 2022-23 is on its way to being another record-setter. According to the auditor’s report, there have already been 74 complaints in the first six months — the highest volume for a six-month period, ever.

“Clearly, the hotline continues to be well used,” reads the Fraud and Annual Waste Report.

The steady rise in complaints may simply be due to more and more people learning about the hotline. Regardless, auditors have indicated that the numbers have exceeded expectations.

“Based on the experiences of other Canadian cities that operate similar fraud and waste hotlines, it was estimated that the City of Hamilton would receive 50-70 reports in a 12-month period. During the first year of the pilot period, July 2019 to June 2020, the volume of reports received by the Office of the City Auditor exceeded the initial expectations, with 85 reports received,” the report explains.

“For the second year of the pilot period, July 2020 to June 2021, the 80 reports received also exceeded the original forecast, as did the third year ending June 30, 2022, with 107 reports.”

city of hamilton city hall fraud waste hotline report auditor

Without the Fraud and Waste Hotline in place, auditors believe it is unlikely many of these complaints would have been received and “wrongdoing involving City resources may have continued.”

“Generally speaking, it indicates Hamiltonians and employees alike share the commitment to protect the City of Hamilton’s revenue, property, information, and other assets and resources from fraud, waste and other wrongdoing,” according to auditors.

Fraud is defined in the report as “an array of irregularities and illegal acts characterized by intentional deception,” while waste involves taxpayers not receiving reasonable value for money “in connection with any government-funded activities due to mismanagement or an inappropriate or careless act or omission by those with control over or access to government resources.”

More information regarding the hotline can be found on the city’s website.

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