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As employees return, complaints of fraud increase

Thursday, June 16, 2022 by Jo Clifton

Allegations of fraud, waste and abuse by city employees declined during 2020 and 2021 as a large number of employees worked from home. Brian Molloy, chief of the integrity unit at the Office of the City Auditor, told City Council’s Audit and Finance Committee on Wednesday that his division received 275 such complaints about city employees in Fiscal Year 2018. That number climbed to 333 in FY 2019, but fell substantially after the Covid-19 pandemic hit the city. He said his office received 282 ethics complaints during FY 2020 and just 242 in FY 2021.

However, so far this year, auditors have received 185 allegations about ethics rules violations by city employees. That number puts the complaint level on track to reach 278 complaints this fiscal year, he said, which represents a 15 percent increase over last year. If complaints continue at the rate observed in March, April and May, Molloy said, the number of complaints could reach 300 this year, with the bulk of the increase likely related to employees coming back into the office.

So far this fiscal year, Molloy’s office has completed seven investigations. Of those, five were substantiated allegations, one was determined to be unsubstantiated and one investigation was inconclusive.

The integrity unit receives the majority of its complaints anonymously, with 69 percent of complainants using the department’s online reporting form. Another 11 percent of those reporting apparent fraud, waste or abuse do so through the city’s whistleblower hotline. Just 6 percent of those complainants call investigators directly. The frequent use of the online reporting form reflects industry standards that say allowing anonymous reporting is more likely to bring in complaints.

Conflict of interest is the most common allegation Molloy’s office receives. So far this year, the integrity unit has received 18 allegations related to conflicts of interest. Theft comes second, with 11 such complaints so far this year. There have been seven allegations of abuse, another seven related to misuse of city resources and four allegations of waste.

The audit staff also receives a number of complaints outside its jurisdiction. About 28 percent of those relate to human resources issues, such as harassment, discrimination or retaliation. Another 15 percent are related to department operational issues. Those complaints are referred to the department or to HR.

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