Forensic audit over fraud expected within weeks
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Feb 10, 2014  |  Vote 0    0

Forensic audit over fraud expected within weeks

Hamilton Mountain News

 By Kevin Werner, News Staff

 A long-awaited audit on how a city employee could steal over $1 million in funds could be finally completed and presented to councillors within a few weeks.

Acting Corporate Services General Manager Mike Zegarac said he had been expecting the audit, being conducted by forensic accountant John Douglas, at the end of January.

“I’m hoping (to receive the document) over the next few weeks,” said Zegarac.

Zegarac said the audit has taken so long because of the extensive interviews and work involved in putting together the report. City staff hired the accountant last summer to begin his investigation. The city requested the audit and within the terms of reference wanted Douglas to provide recommendations on how the city can better handle its cash.

“We asked him for his observations on better safeguards,” said Zegarac.

City officials discovered discrepancies last spring when staff reviewed its cash handling policies. The Hamilton Police were also called in by city staff to investigate the fraud that occurred over nine years. The fraud occurred despite the city conducting two audits during the same time period when the fraud was occurring.  No charges have been laid.

Zegarac said the fraud involved a transfer of cash between service providers and the city.

An employee who had been fired by the city had grieved his termination. The city has not disclosed the name of the employee.

Zegarac said the auditor’s report will be sent to council rather than to staff to preserve the arms-length investigation city staff has performed He added that the report will also be made available to the Hamilton Police Service as part of its investigation.

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