Ottawa fraud hotline flags surge in serious staff misconduct, time theft

The City of Ottawa’s fraud and waste hotline is uncovering a growing body of serious employee misconduct, including time theft, misuse of overtime and staff working second jobs while on sick leave, according to a new report from the Office of the Auditor General (OAG).

While the hotline logged slightly fewer new complaints in 2025 than the year before, investigators substantiated 57 cases of fraud, waste or serious wrongdoing — many of them tied directly to basic HR controls around attendance, overtime and supervision.

Business Integrity or Compliance issues accounted for the largest share of substantiated investigations, with 42 cases confirmed. In some of these, supervisors failed to intervene despite warning signs, resulting in “excessive amounts of overtime.”

Misuse or Misappropriation of Assets produced another 15 substantiated investigations, highlighting systemic problems with attendance management and conflict‑of‑interest controls. In one case, “a City employee was working a second job with an outside employer while on paid sick leave with the City.” In others, employees “were found to be working a second job during their working hours with the City,” misrepresenting hours worked to inflate overtime, using City vehicles for personal purposes, or being “found to be sleeping while on shift.”

Employee misconduct can be a more serious issue if there’s more than one employee committing the misconduct, according to a previous report.

Discipline for misconduct

The pattern of allegations underscores that misconduct is not confined to one unit or type of behaviour. Transit Services generated the highest number of reports (90, or 30% of the total), but Public Works, Emergency and Protective Services, Community and Social Services, and Recreation, Cultural and Facility Services all recorded double‑digit case counts.

Human Resources‑related cases, covering “workplace culture or labour relations issues,” also spiked to 28, up from just seven in 2024.

Management responses show that discipline and policy fixes are now routine outcomes when misconduct is confirmed. In 2025, leaders issued 112 corrective actions tied to investigated reports, including 37 mandatory reviews of policies and procedures, 15 written communications to all staff in affected departments, 11 process improvements, and a series of individual sanctions. These ranged from letters and verbal warnings to increased performance management, suspensions and five terminations, along with at least one case of financial repayment.

The OAG also made 10 formal recommendations from its own investigations and two more through management letters, while completing a comprehensive review of the city’s Fraud and Waste Policy to “improve its clarity and readability, and enhance the Programme’s overall transparency.”

Who is reporting, and where do issues arise?

Employees remain the primary source of allegations in Ottawa. In 2025, 59% of reporters identified as City of Ottawa employees and 41% as members of the public. “Reports can be filed anonymously; however, self‑identification as an employee or member of the public is required,” the report notes. For HR professionals, the figures underscore that staff are willing to bypass traditional internal channels when they believe a neutral venue is available.

Transit Services again generated the highest volume of cases, with 90 reports representing 30% of the 2025 total, although its share fell from 42% in 2024. Public Works received 25 reports, Emergency and Protective Services 19, and several other departments, including Community and Social Services and Recreation, Cultural and Facility Services, recorded double‑digit counts. This spread suggests that integrity risks—and the HR practices behind them—are organisation‑wide rather than confined to a single branch.

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How can you stop employee fraud?

Here is how HR and business leaders can stop employee fraud, according to The Intuition Finance Digest’s LinkedIn article:

1. Train your employees – Training should reinforce the real costs of fraud to the organisation, from financial losses and reputational damage to disrupted operations, reduced morale and even job losses.

2. Be proactive – Use continuous monitoring software that can flag unusual patterns or behaviours in real time, giving organisations a consistent view of potential red flags.

3. Implement a fraud risk management framework – This helps identify and assess potential vulnerabilities so teams understand where risks are most likely to emerge and which areas require the greatest attention.

4. Implement well‑designed controls that create clear boundaries around who is responsible for what, limit opportunities for misconduct, and ensure that important processes never depend on a single individual.