Fraud

Fraud

On January 13, Council approved a new Fraud Policy for the organization. This policy replaces the existing Whistleblower Policy and is intended to safeguard the City’s assets, funds and information from fraudulent activity. If you have a concern about potentially fraudulent activity at the City of St. John's, please contact us:

Call: Fraud Line (576-6978)
Email: reportfraud@stjohns.ca
Mail: Office of the City Internal Auditor – Fraud Hotline, P.O. Box 908, St. John’s, NL  A1C 5M2. 

What is “fraud”?
Fraud is considered to be a deliberate act to obtain property, money, security or any service from the City by means of deceit or falsehood. It includes falsifying records  or documents; unauthorized use of City resources, failing to declare a conflict of interest; theft or misappropriation of City funds or property; collusion with vendors; intending to deceive by suppressing the truth or suggesting something is false; and misrepresentation of information. 

Fraud does not include unintentional acts of negligence or poor performance by employees or contractors.  These types of issues should be addressed through normal human resource management processes.

Who can make an allegation of fraud?
Any member of the public or employee of the city of St. John’s can allege fraud if they have reasonable grounds to believe that fraud has occurred. 
Employees who reasonably believe that fraud has occurred have a duty to notify their manager, a member of Executive or the Office of the City Internal Auditor.

How can an individual make an allegation of fraud?
Fraud allegations can be made via the Fraud Line (576-6978) , via email at reportfraud@stjohns.ca, or via regular mail at Office of the City Internal Auditor – Fraud Hotline, P.O. Box 908, St. John’s, NL  A1C 5M2. 

While allegations can be made anonymously it is important to note that the Policy outlines the importance of confidentiality and protection from reprisals. The identity of persons involved in an investigation, including the identity of a person alleging fraud and the identity of the person alleged to have committed fraud, will be protected to the fullest extent possible.  It should also be noted that any employee who knowingly makes a false or bad faith allegation will be subject to disciplinary action.

Who will investigate allegations of fraud?
All allegations received will be investigated using best practice approaches by the Office of the City Internal Auditor. The City Internal Auditor will coordinate with the Department of Human Resources and the City Solicitor when an allegation involves an employee. Decisions to prosecute or refer investigation results to the Royal Newfoundland Constabulary or other regulatory agencies for further investigation will be made in consultation with the City Internal Auditor, City Manager, City Solicitor and the Director of Human Resources.

Are members of Council and senior staff at the City subject to this policy?
Yes. Allegations made against a member of Council or senior staff person at the City will be initially reviewed by the City Internal Auditor in consultation with the City Solicitor and, if determined to be substantiated,  an external investigator will be engaged to investigate.

What information does the City Internal Auditor require to conduct an investigation?
While allegations can be anonymously, the City Internal Auditor must have adequate particulars about the alleged fraud to conduct an investigation. The more detail provided, the better. Allegations should also be timely, so that investigating it serves a useful purpose. There should be a reasonable prospect of the allegation being substantiated.

What steps will the City Internal Auditor take to investigate an alleged fraud?

  • When an allegation is received, step one for the City Internal Auditor is to take immediate action to prevent theft, alteration or destruction of relevant evidence, including any records. The City Internal Auditor will advise appropriate managers and/ or departments of the investigation to assist in securing any evidence and may also engage the Manager of Corporate Risk and Recovery.
  • When an allegation involves an employee, the City Internal Auditor will coordinate the investigation with Human Resources and the Legal Department.
  • Depending on the nature of the allegation, the City Internal Auditor may delegate the appropriate departmental manager to investigate and report on the status and outcome of their investigation.
  • While a person suspected of fraudulent activity will not be confronted at the start of an investigation (unless the allegation is considered to be urgent),  those alleged to have committed fraud will be provided an opportunity to respond to the allegation as part of the investigation.
  • The City Internal Auditor will use industry best practice tools to conduct their investigation.
  • If necessary, the City may refer a matter to the Royal Newfoundland Constabulary or other regulatory agency for an independent investigation.
  • At the conclusion of the investigation, the City Internal Auditor will provide the City Manager with recommendations to address any underlying causes and to correct internal control deficiencies. They will also report annually to the Audit Standing Committee information related to fraud allegations and investigations conducted during the year.

What protections are in place to prevent an employee who makes an allegation from reprisals?
Employees who are aware of fraud or who suspect fraud have a duty to report it. However, they may fear reprisals if they do so. The policy defines a reprisal as “any measure taken or threatened against a person as a result of making or being suspected of making an allegation or participating in or being suspected of participating in an investigation.”

Reprisals for disclosing fraud or suspected fraud made in good faith will not be tolerated. Employees who believe that they are the subject of a reprisal - such as disciplinary measures, demotion, suspension, termination, intimidation or harassment or any punitive measure that adversely affects employment or working conditions – should notify the City Internal Auditor, who will investigate the reprisal.
The City will protect and support any employee who in good faith reports a suspected fraud, and the City Manager in consultation with Human Resources and the Legal Department, will take appropriate action to stop, reverse or remedy a reprisal.

Will the results of fraud investigations be publicly communicated?
Generally, there will be a publicly available report to the audit committee annually that will discuss fraud investigations results.  This report will briefly summarize the results of any investigations and any action taken by the City in response (one paragraph).  Any communication of fraud investigations must comply with the City’s obligation to protect the privacy of its employees and to comply with all provisions of the Access to Information and Protection of Privacy Act, 2015. This includes legal and personnel matters. Council may decide to release the results of significant investigations that relate to the organization’s accountability to the public immediately upon conclusion of the investigation in accordance with the Act.