City reports increase in fraud incidents

The City of Ottawa recorded an increase in fraud reports for the second-straight year in 2024, according to the city’s Office of the Auditor General (OAG). 

The city received 328 reports through its Fraud and Waste Hotline (FWHL), up 16 per cent from the 2023 total. Overall, there was a 17-per-cent increase in the number of such reports from 2020 to 2024. 

“Starting in 2023, the OAG identified an increased trend of reports containing multiple allegations (i.e., reports containing more than one incident or act to investigate),” according to the office.  

“Reports with multiple allegations generally take more time to assess, action, and investigate. This trend intensified in 2024, resulting in an increased demand on FWHL resources and City staff time.” 

Also, in 2024, the OAG received a total of 650 allegations, which is an 83% increase from 2023. 

In 2023, Toronto recorded 1,054 complaints, the highest number of employee fraud complaints in the city’s history.  

Among those that were closed were the following: 

• A city employee was found to be selling city property on Facebook Marketplace in violation of the city’s Employee Code of Conduct.  

• City employees were found to have been completing work for a secondary employer during city working hours in violation of the city’s Employee Code of Conduct. 

• A city employee was found to have removed city equipment and supplies from a city facility for personal use. 

Who is reporting fraud in Ottawa? 

Employees (51 per cent) and the general public (49 per cent) were almost equally responsible for reporting fraud in Ottawa in 2024, according to the OAG. 

The most commonly reported types of fraud were: 

The departments with the highest number of fraud incidents reported were: 

1. Transit Services - 138 

2. Public Works - 42 

3. Community and Social Services - 21 

4. Emergency and Protective Services - 20 

5. Finance and Corporate Services and Planning, Development and Building Services - tied at 18 

Types of fraud reported 

Fraud in the line of business integrity or compliance (140 reports) and misuse or misappropriation of assets (117 reports) were the most commonly reported violations in Ottawa in 2024. 

Of the total reports, the OAG investigated 116 reports and redirected reporters to a city department or a union representative on 47 reports. They also suggested areas for audit or improvement on 18 reports, but found 33 reports to be “not applicable under the FWHL policy”. 

Meanwhile, the OAG closed 116 reports: 

• Substantiated (one or more allegations included in the report were accurate and constituted fraud or waste) - 30 reports 

• Accurate but compliant (one or more allegations were accurate but did not constitute fraud or waste) - 45 reports 

• Inaccurate (none of the allegations included in the report were accurate) - 33 reports 

• Insufficient information to conclude (there was insufficient evidence to support all allegations included in the report, or there was insufficient evidence to determine a conclusion) - 8 reports 

Previously, Canada’s Office of the Auditor General (OAG) fired two workers for having undisclosed contracts with the federal government itself. 

How can fraud be prevented in the workplace? 

Here are some ways that employers can prevent fraud in the workplace, according to Experian’s  Alex Lvoff, a financial risk and consulting industries professional with more than 25 years of experience: 

• Combat synthetic identity fraud with advanced AI models. 

• Strengthen authentication against deep fakes. 

• Enhance detection of payment scams and APP fraud. 

• Optimize Your Fraud Stack for Efficiency and Effectiveness. 

• Build collaborative relationships with fraud solution vendors. 

Ensuring that workers feel that they are part of the workplace culture and providing them with education on fraud prevention are also critical in the regard, says Toby Braun, Founder & Managing Partner, American Special Investigative Group, via Forbes. 

“Well-trained employees become vigilant defenders who can identify and report potential fraud before it escalates,” he says. “Their continuous involvement in daily operations positions them as crucial assets in any comprehensive anti-fraud plan. Investing in employee education is not just a safeguard; it’s a catalyst for building a resilient, fraud-resistant organization across different departments.”