In its February 2024 report entitled Auditor General’s 2023 Annual Report on the Fraud and Waste Hotline, Toronto’s Auditor General released the results of an internal investigation that was prompted by a complaint to the City’s fraud hotline which uncovered multiple conflicts of interest involving a now-former City employee. On four separate occasions, while still working for the City, the report found that the former employee provided work as a subcontractor under City-issued contracts through a company that was owned by the employee. The report confirmed that the employee failed to disclose or seek the City’s approval prior to any of those engagements.
As a result of the investigation, the Auditor General confirmed that the City was in the process of “making internal control improvements to avoid future conflict of interest situations, which include updating its fraud awareness training and reviewing the existing conflict of interest policies to ensure staff awareness.” The report also noted that the City subsequently updated its tendering documents to address these types of potential conflicts in the future. As this case study illustrates, purchasing institutions should update their internal governance rules and tendering documents to ensure that they adequately address potential conflicts of interest, including conflicts involving employees, and should implement internal training programs to ensure compliance with those rules.
