Tip line reveals Hamilton manager had relatives connected to major projects worth $95M

A manager working for the City of Hamilton who was overseeing major capital projects didn't disclose that two family members worked for firms each involved in a dozen projects, according to a new Hamilton auditor's report.

Those projects were valued at a total of $95 million, the report said.

Another manager had a "significant social relationship" with two vendors who received "substantial business" with the city over several years, the report said. One of the vendor's "serious performance issues" and "belligerent behaviours toward staff" were tolerated and favours were exchanged.

These conflict of interest cases are two of 33 reports of wrongdoing involving staff that the auditor's office dealt with between July 2021 and June 2022. 

City auditor Charles Brown presented the annual fraud and waste report to the audit, finance and administration committee on Thursday. It does not reveal staff names or divisions.

"We've noted for the second year now the recurring issue of staff having undisclosed conflicts of interest — conflicts that are not reported or not properly addressed," Brown told councillors. 

In both instances, the managers no longer work for the city, the first was fired and the second resigned, but they demonstrate the need for improved conflict-of-interest training, said Brown.

The city is also working on updating its policy to be more specific about what's not allowed.

Other hotline tips pointed to missing iPads, unsafe DARTS vehicles

Whistleblower complaints made through a hotline helped the city uncover the conflicts of interest, Brown said. 

The hotline was launched in 2019 to help the city reduce losses through fraud and waste, said the report.

To date it has investigated $1.1 million in actual and potential losses and recovered $33,000. 

Between 2021 and 2022, it received 107 reports from staff and the public, 32 per cent of which were substantiated, the report said. 

Coun. Brad Clark said the hotline has exceeded council's expectations. 

"We were clearly seeing our staff are watching other employees and where they think there's an issue they do notify the auditor," he said at the committee meeting. "We want to encourage that level of trust."

Other reports the auditor investigated and made recommendations on include: 

• An accessible transit (DARTS) subcontractor that maintained part of the fleet was sending vehicles back on the road in an unsafe condition. The auditor found that nearly half of the vehicles failed inspections and had issues with brakes, tires and steering, among others. 

• 18 iPads belonging to the city had "gone missing," which was reported to police. The city did a review of how its IT department manages its assets and four iPads were recovered. 

• A division's inventory had a shortfall of supplies worth about $200,000. The city determined the discrepancy was due to challenges faced by the division including a new inventory system and staff, plus COVID-19 related pressures.