The City of Buffalo's problem-plagued Human Resources Department is being rocked by another scandal that might trigger a criminal probe and the firing of two employees, city officials said.
The two workers have been suspended without pay as separate investigations by the city Law Department and the Comptroller's Office continue, The Buffalo News has learned.
The reviews have uncovered evidence of numerous "improprieties," said First Deputy Mayor Steven M. Casey.
One claim involves an employee in the benefits office who also was working for a city vendor, shepherding some of the firm's invoices through the City Hall bureaucracy. Administration officials contend that the employee failed to disclose the second job to the administration or obtain permission to work it, as required by law.
The vendor, Buffalo OccMed, reviewed medical bills submitted by city workers who were injured on the job. The company was paid to verify that the city was paying the correct rates and that the city was compensated when discrepancies were uncovered. City auditors said the city paid OccMed more than $1 million over four years.
City benefits specialist Maureen A. Higgins was working for OccMed and even processed some of the company's bills, administration officials disclosed.
Higgins has been suspended without pay, along with her former supervisor, Tracy A. Healy, pending disciplinary hearings.
The city intends to fire the two employees, said interim Corporation Counsel David Rodriguez. He added that Healy is facing four charges, one of them involving the controversy over OccMed.
Officials would not comment on the other charges because they involve a personnel matter.
"Clearly, you had managers making bad decisions and employees doing inappropriate things," Casey said.
Robert J. Reden, a union attorney, said Thursday that Higgins told Healy about her second job and that Healy properly informed her that she had no obligation to file a disclosure form. Reden said Higgins is a unionized employee who is not a policymaker and therefore is not required to make such a disclosure. Healy resigned as benefits director 16 months ago to return to a lower-paying civil service job as a benefits specialist.
Depending on what additional information the probes uncover, Rodriguez said it's possible the city will ask criminal prosecutors to investigate.
Is OccMed also a target in the ongoing internal probes?
"We're looking at every party involved in this matter," Rodriguez said.
The attorney for OccMed who has been corresponding with city officials could not be reached to comment.
Reden said he believes city officials are overreacting. "From what I know, they're making a mountain out of a molehill," he said.
He claimed that neither Higgins nor Healy did anything improper. As for Higgins' second job, he said she told her supervisor, even though he maintained she was under no legal obligation to do.
"She didn't defraud the city. She wasn't altering the bills in any fashion," he said.
As for the city's case against Healy, Reden noted that she quit her management job in 2010 to return to her unionized position. The union will argue that Healy cannot be disciplined for actions that involved a managerial job she left 16 months earlier.
City auditor Darryl McPherson confirmed that his office began a review of OccMed in late spring after a questionable invoice was discovered. At that time, Mayor Byron W. Brown's administration had already been looking into concerns involving the benefits office, Casey said this week. "The minute we discovered it, we started taking action," Casey said.
The city's contract with OccMed expired in June. McPherson said the city has withheld payment to the company pending an audit that he hopes to complete by mid-September.
Problems in the Human Resources Department have been making headlines for the past year. Brown fired Commissioner Karla L. Thomas in the wake of disclosures by McPherson's office that the city had been paying health insurance premiums for dead city retirees.
More recently, Compensation and Benefits Director Antoinette Palmer was suspended without pay after city auditors revealed that Palmer's office had failed to try to block Thomas from collecting unemployment benefits after she was fired. Palmer remains on suspension pending an ongoing internal review.