Hundreds of thousands of Hamilton taxpayer money ‘wasted’ on golf, cars and trips: report

A pilot project launched in 2019 by the City of Hamilton to tackle fraud and waste in the running of the municipality has been deemed a great success after it led to hundreds of thousands of dollars of ‘waste’ being detected.

According to a recent report from the Office of the City Auditor (OCA), since the launch of the City’s Fraud and Waste Hotline in July 2019 more than 160 complaints have been filed and the cumulative total of actual and potential losses investigated is approximately $439,000, with $26,000 recovered via repayments/restitution.

The report, which focussed more closely on the period between July 2020 and June 2021, notes that during that time, a total of 80 reports of fraud or waste were filed and 13 were substantiated in ensuing investigations, six were ‘partially’ substantiated, 24 were unsubstantiated, 10 have an outcome pending and 27 were not applicable.

To date, OCA investigations related to fraud and waste has resulted in eight terminations of City of Hamilton employees and several disciplinary actions.

The OCA report provided some examples of the cases they were tasked with investigating.

Here’s a brief outline of some of those and their outcomes:

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• In one case, the OCA substantiated a report that a CIty of Hamilton employee was using a city vehicle to conduct their personal business to an ‘extreme’ level. So much so, further investigation into wider systemic issues was launched, the outcome of which is expected to be tabled in 2022.
• One investigation was launched when one employee accused a colleague of time theft and sick-time abuses. A closer look found the initial employee’s complaint to have been made in ‘bad faith’ and that, in fact, the complainant was ‘engaged in a wide range of inappropriate behaviours,’ and was subsequently terminated.
• Another case that resulted in the termination of three City employees involved golf during business hours with a City vendor who was in the process of submitting a proposal worth $2 million to the city. The investigation subsequently found ‘evidence of more widespread socializing with a range of vendors.’ Some vendors reportedly ‘sponsored’ a City staff Christmas party by paying for alcohol; some employees are said to have accepted gifts from vendors; in one case, an employee went on five international trips with vendors. The OCA estimated there was $233,000 of waste/mismanagement at issue in this investigation in the form of increased expenses to the City and undisclosed hospitality benefiting the employees.
• Other cases involved allegations into the theft of City of Hamilton property; inappropriate use of parking passes; inappropriate use of a confidential database; and city crews doing work at a city employee’s residence.

As of September 30, 2021, the amount of confirmed loss or waste substantiated by the Office of the City Auditor since the last Annual Report (filed in late 2020) was issued was $235,000. Of this amount, $2,000 was the result of fraud and $233,000 was waste.

Since the launch of the Hotline cumulatively $439,000 of loss or waste has been substantiated. Of this amount $102,000 was the result of fraud, $278,000 was waste, and a category was unable to be determined for $59,000.

“Overall, the first twenty-four months of the Fraud and Waste Hotline operation have been successful, by and large, with a high volume of reports assessed and investigations launched as appropriate,” the OCA report concludes.

“Without a Fraud and Waste Hotline in place, it is likely that many of these reports would not have been received by the Office of the City Auditor and wrongdoing involving City resources may have continued.”

The auditor’s report can be found in its entirety here.