Item - 2016.AU5.2

Committed to Integrity, Transparency and Accountability

This report represents the 2015 annual report on fraud and wrongdoing at the City including the activities of the Fraud and Waste Hotline Program (the Hotline Program).  It highlights only those issues that have been communicated to the Auditor General’s Office.  It does not represent an overall picture of fraud or other wrongdoing across the City.

In 2015, 572 complaints were received by the Auditor General’s Office.  A significant number of complaints included at least two or more allegations.  We estimate the actual number of allegations is in the range of 800.

The Auditor General’s Forensic Unit is comprised of a multi-disciplinary team of professionals that operate the Hotline Program and collectively possess the expertise to resolve a broad range of complaints and conduct investigative work into allegations that are often complex in nature.

All complaints are triaged based on a number of considerations including the nature of the allegations, previous similar complaints, audit issues identified by the Auditor General’s Office and potential risks.  The Forensic Unit does not have sufficient resources to fully investigate all allegations received and is selective in the investigative work it conducts or leads.  In 2015, the Forensic Unit conducted preliminary investigative work in 85 per cent of complaints.  In cases where additional work is required, complaints are usually forwarded to management to further investigate the matter.  Management reports the results of its investigations that then become the subject of independent oversight by the Forensic Unit.  A determination is made as to the adequacy of management’s work and whether additional investigative work will be conducted by the Auditor General’s Office. Not all matters can or should be investigated by management.  Echoing concerns in last year’s annual report, lean resourcing is impacting every stage of our operations.  The level of oversight by the Forensic Unit due to current resources presents a risk to the City.

In relation to investigations conducted by management, it is critical that management led investigations be conducted by staff qualified to deal with the sensitivities of investigating wrongdoing.  Despite corporate training developed by Human Resources on “How to Conduct Workplace Investigations”, given the complexity of fraud and wrongdoing, management has often requested guidance from the Auditor General’s Forensic Unit.  To maintain independence, the Forensic Unit should not be guiding management actions in workplace investigations.  There appears to be a continuing need to ensure comprehensive training and resources are made available to support City staff tasked with investigating complaints.