Auditor General’s 2008 Annual Report on the Fraud and Waste Hotline|
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At today’s meeting of the Audit Committee, the City of Toronto administration presented its response to the Auditor General’s 2008 Annual Report on the Fraud and Waste Hotline.
The City of Toronto’s senior management team takes very seriously every instance of waste or wrongdoing and acknowledges the importance of the Auditor General’s findings. The City enforces its Fraud Prevention and Conflict of Interest policies which direct staff in their responsibility to conduct themselves in an ethical and honest manner.
The City agrees with and is acting on the one recommendation regarding internal controls that the Auditor General makes in the report. Management staff will regularly review and evaluate the adequacy of internal controls within their area of responsibility and take action, where appropriate, to strengthen internal controls to prevent and detect instances of fraud and wrongdoing.
The Auditor General’s Report identifies that 619 concerns over possible waste or wrongdoing were reported in 2008 (an 18 per cent increase from the number of concerns reported in 2007). However, only 42 (or seven per cent) of those concerns were found to be substantiated in whole or in part - which is a 16 per cent drop in substantiated concerns from those cited in the 2007 report.
The 2008 report involves less than one-tenth of one per cent of the City’s staff.
With respect to the item in the report regarding the cancellation of some of the parking tickets issued to one offender with more than 500 parking tags, the Auditor General, during his presentation to Audit Committee, today stated:
“In spite of what has been reported, not once has there been any indication that these tickets had been “fixed”. If there was evidence to the contrary, the police would have been contacted immediately - and we saw no need to contact the police.”
The Auditor General stated clearly that this was not a case of ticket fixing and stated today that his office had thoroughly investigated the matter, had issued a report to management with recommendations and that management had responded satisfactorily to those recommendations. The Auditor General stated that the tickets that were cancelled were generally due to the timing requirements under the Provincial Offences Act.
In many of the instances cited in the report, the City’s own management staff brought the wrongdoing and waste to the attention of the Auditor General. In other instances, tips to the City’s Fraud and Waste Hotline were responsible for bringing the matter to the attention of management.
In his report, the Auditor General also recognizes that the City has implemented changes to rectify internal controls and has taken appropriate disciplinary action in response to findings. The City’s management is responsible for ensuring that the appropriate disciplinary actions are taken where required, up to and including suspensions and dismissals.
Of the 15 substantiated complaints cited in the Appendix to the Auditor General’s report, three complaints involve non-employees (those involved a child care service provider, two contractors and an employee of an agency contracted by the City). The City imposed discipline for all 19 employees involved in 10 of the 12 substantiated complaints which involved employees.
• Three of the employees had their employment terminated.
• Ten employees were suspended without pay. These unpaid suspensions lasted as long as 20 days (four weeks). Fifty per cent of the suspensions were for 10 days (two weeks) or longer.
• Two employees received a written reprimand.
• Six employees received a Letter of Expectation.
• In the remaining two complaints which involved employees, in one case the employee resigned before discipline could be imposed and in the other case no discipline was imposed because the allegations which might have been the subject of discipline were not substantiated by the Division.
The City does not terminate the employment of every staff member that is found to have made an error in following a particular policy. Management considers all of the circumstances before taking appropriate disciplinary action, including where there are circumstances that clearly show an otherwise good employee made an isolated error and did not have a criminal intent or experience a personal gain. In those instances management recognizes that, while discipline may be appropriate, dismissal may not.
The City’s management team continues to implement both new and existing controls to prevent and detect instances of fraud and waste.
Financial accountability is a top priority for the City. The City goes to great lengths to promote the Fraud and Waste Hotline, as well as ethics and integrity in the conduct of City business. Training and reinforcement of ethical conduct is constant at the City.
The City established the Fraud and Waste Hotline (416-397-7867) in 2002 as the first of its kind in Canada. The Hotline is one of the ways for members of the Toronto Public Service and the public to anonymously report suspected fraud, waste or other wrongdoing involving City resources.
Sections 177 through 182 of the City of Toronto Act, 2006 require the City to appoint an Auditor General and specify powers and duties of the Auditor General. Under the Act the Auditor General is responsible for assisting City Council in holding itself and City administrators accountable for the quality of stewardship over public funds and for achievement of value for money in City operations.
Kevin Sack, Director, Strategic Communications, 416-397-5277 (office), 416-919-6500 (cell)