Hamilton taxpayers could be stuck with $1M city hall fraud bill

Taxpayers will be on the hook for some or all of the $1 million missing from city hall if police dont lay charges against an employee a notion one councillor calls disturbing.

Hamilton police have been investigating the fraud for nearly a year, but still havent laid any charges in a case that saw a city hall employee fired last year.

If no charges are laid, the insurance company wont cover some or all of the missing money, said finance head Mike Zegarac. That means the cost would fall to taxpayers.

Thats disconcerting, said Coun. Brad Clark of Stoney Creek.

I do not understand how charges cannot have been forthcoming given the confession, Clark said. But Im not a lawyer.

Councillors have received no update on the police investigation, he said. Its time there was a public update.

If they dont have sufficient information to lay charges, then say so, he said. If they have sufficient information to lay charges, then lay the charges.

Clark wants to know in the realm of what the police can share with us, whats happening.

Its in the media. The public has a right to know.

• RELATED:New Hamilton-wide cash-handling policy aims to prevent fraud

The city announced the alleged fraud in a late-night press conference last June. A finance and corporate services employee was fired after admitting to stealing $1,058,235.20, staff said. The money went missing over nine years.

Hamilton police have not commented on the investigation over the months, only saying that its ongoing. Calls to the police spokesperson were not immediately returned Monday.

If no charges are laid, the insurance policy is unlikely to cover the full amount of the loss, Zegarac said. That means it lands on taxpayers.

In terms of our insurance policy, we fully expect the outcome of the Hamilton Police Service investigation will impact our ability to recoup those costs.

A forensic auditor is still investigating city procedures to make sure theyre safe from fraud. Zegarac expects the forensic auditors to make a presentation in a few weeks.

The citys audit, finance and administration committee reviewed a new cash-handling policy Monday aimed at preventing future frauds.

But the report still revealed as many as 75 cash boxes around the city, and different procedures followed by different departments. Staff will come back with another report.

In the meantime, the city is still prone for another fraud, Clark said.

We are not safe, he said. Categorically, no, we are not safe.