Vaughan misconduct hotline use drops; reports of business integrity issues spikes
Four of 12 reports filed by employees point to a single city department

YorkRegion.com
May 2, 2017
Adam Martin-Robbins

Use of the city’s hotline — set up so employees can anonymously report suspected fraud or other unethical behaviour — dropped off last year, but there was a spike in reports of business-integrity issues, such as conflict of interest and vendor or customer issues 

In 2016, employees filed 12 reports through the anonymous reporting system, down from 18 in 2015 and 16 in 2014, the year it was launched. Based on benchmark data from comparable municipalities, the city should expect to see about 21 reports. 

“It could be that employees are still not understanding the system, what it’s there for. It could still be that fear (of reprisal) … The other side of it could be that, maybe, there really aren’t any issues going on in the city that employees are seeing and therefore there’s no need to report,” Kevin Shapiro, Vaughan’s director of internal audit, told councillors at a finance committee meeting Monday, May 1. “I think when we do the governance and accountability survey later this year, we’ll have a better idea whether that fear of reprisal that has come out as a theme in the past governance and accountability surveys are still there.” 

But, he pointed out, there’s already been seven reports in 2017.

Of the 12 reports filed last year, three were “substantiated.”

Though that’s lower than in comparable municipalities where substantiation rates are 40 per cent, Shapiro said it’s “not unexpected given that this system is still relatively new.”

“It should be noted that a substantiated report does not always reflect unethical conduct, it may reflect the absence of or nonenforcement of a policy or procedure or improper application of a business process,” he added. “In addition, unsubstantiated reports do not necessarily mean that the report was without merit or does not add value. Unsubstantiated reports can still highlight potential risks or internal control weaknesses that may need to be addressed.” 

Six, or 50 per cent, of the reports filed by employees in 2016 related to business integrity, which includes conflict of interest and vendor or customer issues. That’s up from 22 per cent in 2015 and six per cent in 2014. 

Two of the six reports were substantiated and four raised concerns in one particular department.

Shapiro’s report doesn’t identify the department or mention if the substantiated reports led to employees being reprimanded or fired.

He wrote in his report the incidents were” thoroughly investigated” and “senior management took these matters seriously and immediately addressed the situation,” which included implementing "business process improvements" and "organizational changes."

Shapiro also said that back in December he reported to council, behind closed doors, about the investigation into those issues.

Of the six other reports employees submitted through the hotline, three related to human resources issues such as hiring irregularities, discrimination, harassment and favouritism. One of those three was substantiated.

Two reports related to the misuse or misappropriation of corporate assets including theft and time abuse. They weren’t substantiated.

Another case, related to accounting, auditing and financial reporting. It wasn’t substantiated either.