A report by the City Auditor indicates many city employees have witnessed fraud, waste and abuse by co-workers - leading officials to recommend the creation of a whistleblower hotline at City Hall.
In a report issued this week, City Auditor Jorge Oseguera's office wrote that establishing a whistleblower hotline could save the city millions of dollars each year. The Association of Certified Fraud Examiners (ACFE) estimates that "a typical organization is estimated to lose 5 percent of its annual revenues to fraud," according to the auditor's report.
If that's the case, Sacramento could be losing $30 million a year to fraud, the auditor says. If the auditor's office handled the hotline with current staffing it would cost about $9,000 a year. Hiring a new employee to handle the hotline - an option that would allow the office to handle more calls - would be an estimated $200,000 a year.
Oseguera is asking the City Council for direction on whether to create a whistleblower hotline for the fiscal year beginning in July.
Oseguera's audit shows that cases of fraud at the city are fairly common. Of 580 city employees who responded to a survey, 45 percent reported hearing of a fellow employee who used their "position or authority to advance a personal financial interest."
Another 46 percent knew of someone who used "City resources (like computers, vehicles, phones) for personal gain or for outside employment."
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