$80 Million Fraud Case

New York City — Zac Townsend @ December 16, 2010 4:49 pm

Yesterday six people were charged with a $80 million fraud case around the City's new payroll system called CityTime. I'm annoyed at a professional level, since as a contractor with the City I think I do good work, and now contractors and their fraud/waste will be a target of criticism. But my immediate question was how can you possibly steal $80m from the City, starting in 2005, and have no one notice. I understand if you have trouble accounting for every nickle and dime, but when a few hundred thousand dollars go missing, doesn't someone take notice? The indictment raises questions of the city’s oversight of the CityTime project, and how this could happen. The program is overseen by the Office of Payroll Administration, which is run by both the mayor’s and comptroller’s offices, but it isn't yet clear how one can lose control of a project to such an extent that this much money can go missing and it isn't noticed. The WSJ notes that "The project's costs skyrocketed to more than $738 million from $68 million, and in September the city reached an agreement in which it wouldn't make any more payments related to the project." Things are going poorly when you have someone steal more money than the whole original project costs. Even worse, when you look at the City's organizational chart, the office reports directly to the Mayor and Comptroller. Even if the Director of Payroll Administration is incompetent, you would have hoped that someone on the Mayor's staff would have noticed a missing $13 million a year.


No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.