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Auditor: 253 fraud allegations filed this year

Monday, October 30, 2017 by Jo Clifton

It was a busy year for investigators at the Office of the City Auditor’s Integrity Unit. They sifted through 253 allegations of fraud, waste and abuse and completed 20 investigations during Fiscal Year 2016-17, which concluded on Sept. 30.

Nathan Wiebe, chief of the investigative unit, laid out the scope and the numbers in a report to the City Council Audit and Finance Committee last week.

From the Fleet Services Department to Austin Water to Austin Public Health, auditors investigated allegations about employees accused of using their city computers and city time for outside work, wasting resources by buying the wrong equipment, and sleeping on the job.

In the past year, auditors completed 20 investigations related to alleged fraud, waste or abuse by a city official, including employees and commissioners.

Twelve of the 20 were investigations initiated during FY 2016-17, Wiebe said, noting that there had been more investigations started in the previous year, but a larger portion of the 2017 investigations resulted in reports. Eight investigations started in FY 2015-16 were concluded in 2017.

In three instances the employee accused of violating city regulations resigned. In three instances, the department took “disciplinary action,” and in another case, the employee was reassigned to another department from the City Manager’s Office. Three of these cases are still pending before the Ethics Review Commission, including allegations against former police monitor Margo Frasier. One complaint was dismissed without further action.

In FY 2013-14, the office received 208 allegations. That number increased to 248 in FY 2014-15 and rose to 306 in FY 2015-16, Wiebe noted. After that significant increase, the number dropped for the year that just ended.

Of the 20 completed investigations, auditors reported they found sufficient evidence to conclude that there was a violation of the city’s policies in 15 cases. In two, they were able to conclude that a violation did not occur. In the three other cases, auditors said they did not find sufficient evidence to say whether a violation had occurred.

Auditors receive numerous complaints referring to matters outside their jurisdiction. For FY 2016-17, 66 percent were judged to be outside the auditor’s purview, Wiebe said. When that is the case, the complaints are referred to other departments. For example, personnel issues are reported to the Human Resources Department and criminal matters are referred to the Austin Police Department. Of the complaints received, 45 percent were classified as personnel issues, 7 percent as criminal issues, and the remainder as “operational issues,” according to the report.

The majority of allegations the auditor’s office investigates come through the hotline program, which includes reporting by phone and online. Auditors said 69 percent of the allegations they received in the past fiscal year were through the hotline program. Another 25 percent came through direct contact, including in-person visits and direct phone calls. Just 6 percent came by a referral from departments or other audits.

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Photo by John Flynn.

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