A Port Coquitlam city employee stole approximately $175,000 of taxpayers' money by buying tools with a city-issued credit card and via the city's purchasing system — then reselling them for personal gain, The Tri-City News has learned.
Last week, the employee — whom city hall did not identify — resigned after making the final payment to the municipality to return the large sum of cash that was taken over a three-year period, said John Leeburn, PoCo's chief administrative officer.
On Monday, city managers were told about the theft and asked to relay the news to their department staff by today before an embargoed press release went out (see below).
Coquitlam RCMP was contacted "about a hypothetical situation involving employee theft or fraud," media spokesperson Cpl. Michael McLaughlin said, but no formal complaint has been made by the municipality to date.
Leeburn told The Tri-City News on Monday that Mounties may be called later this month when the results of the second part of the forensic review, which is examining how the employee theft happened and how it can be prevented in the future, are available.
The consulting firm conducting the internal investigation will make its recommendations to senior city managers, who in turn will make a suggestion to city council on whether police should be involved.
Under Section 334 (a) of the Criminal Code of Canada, conviction on a charge of theft over $5,000 carries a maximum prison term of 10 years, though such a lengthy sentence is rare, Cpl. McLaughlin said.
Leeburn said he was alerted in mid-February to the theft by the employee's co-worker. At the same time, the employee came forward and disclosed the theft of taxpayer funds, he said.
Labour lawyers were informed about the matter and they advised the city "that we would have a much, much better chance of recovering all of the money if we did not involve the police immediately because, once we did, it's likely the cooperation level of the employee disappears," Leeburn said.
Leeburn said the employee admitted to purchasing hand tools, power tools and small equipment since the spring of 2014 using a city-issued credit card and through city-approved vendors who charged the items to the municipality's accounts payable system.
Those items were then taken by the employee and sold through a "third-party broker," who is not a city employee nor has been questioned as part of the forensic review, Leeburn said.
Asked what the employee did with the profits, Leeburn said, "I can't tell you because that would identify the employee."
He added: "You can appreciate what has happened has been incredibly difficult for that family financially and incredibly difficult for that family's relationships. I don't know that anything that serves our citizens by knowing who this is. I'm going to protect the identity of the employee to the best of my ability."
City-issued credit cards are given to a variety of municipal staff — foremen, supervisors and recreation leaders, for example — to purchase items not available on site. Leeburn said 125 out of 550 city employees currently have city-issued credit cards and 42 of those workers don't require a manager's approval as they are senior professionals.
The spending limits range from $1,000 to $10,000 but the majority are permitted less than $2,500, Leeburn said.
Leeburn said the employee's manager has been questioned about the theft "and continues to be as part of Phase 2" of the forensic review. That review, which is not an audit, has so far cost PoCo taxpayers in the "tens of thousands" of dollars, he said.
Leeburn stressed the thrust of the second part of the investigation is to ensure employee theft doesn't happen again.
"It's really disappointing that it's happened," he said. "It's really disappointing for the employee but we'll learn from it and make the changes that we need to make."
"I think there was a lot of emotion around this situation because council and our senior staff truly care about our organization and our reputation," Mayor Greg Moore told The Tri-City News in a phone interview on Monday while travelling outside B.C. "We work hard to ensure something like this can't happen so, when it does happen, it's like getting punched in the gut. I think there was a lot of emotion around the table from all parties."
Moore, who said he knows the employee, said city council doesn't typically get involved in personnel issues but, because such a large amount of taxpayer money was stolen, councillors wanted a say in what happens as the case progresses.
Asked if, at the end of the forensic review, he will vote in favour of the city filing a report with police, Moore responded: "I'm not sure at this point. I want to wait until the next part of the investigation is done so I have a deeper understanding."
He added: "I appreciate the employee recognized they were wrong and did come forward and cooperate with us — not just cooperating by admitting to us but cooperated with the investigation of how he actually did it and how they were actually able to do it and pull it off."
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Following is the full statement issued by the city of Port Coquitlam at 9 a.m. Wednesday:
In early February, an investigation was initiated by the City of Port Coquitlam in response to allegations about the conduct of a City employee. During the early stages of the investigation, the employee came forward stating that s/he had purchased items using City funds and then resold them for personal profit.
Given the seriousness of the situation, the City expanded the investigation to include a forensic review. The value of the items purchased has been identified at just under $175,000.
The employee was cooperative during the investigation, confessed and apologized for his/her actions, resigned and has reimbursed the city for the identified funds.
No other employees have been identified as being complicit or benefitting from the situation.
Having completed the first phase of the investigation (understanding the scope of the misconduct), the City is now turning its energies to reviewing its systems and processes. One of the critical outcomes of the second phase of the investigation will be recommendations on how the City can minimize the risk of future incidents.
“I understand the actions of one person can challenge the public’s trust but I want to ensure our residents that City Council is working to ensure that this never occurs again,” Mayor Greg Moore said. “I want to emphasize our staff are hard-working, honest and genuinely care about the community they serve. I am pleased with the quick and thorough action taken by staff and that the money has been repaid.”
