A Stoney Creek councillor is calling on the city to establish a formal cash-handling policy after staff discovered more than $1 million missing from the city's coffers.

The incident raises alarm bells on how the city handles cash, said Coun. Brad Clark. He's calling for a firm policy that would dictate how employees deal with cash from department to department.

"Over my time here, we've had many discussions about the handling of cash and I don't think we're done here," Clark said at Tuesday's audit, finance and administration committee meeting.

The committee passed a motion, to be ratified on Friday, to have the city's internal auditor start a review of cash-handling policies across the city. The auditor will make recommendations to council on how to strengthen the security around cash handling.

The issue of employees handling cash has been in the spotlight since late June, when an employee was fired under suspicion of defrauding the city of $1,058,235.20 since 2005. Police are investigating and no charges have been laid.

Neither the city nor the police have released any names, but local media have identified the former employee as Michael Hawrylyshyn of Ancaster, who worked as an accounts receivable collections co-ordinator.

An external auditor is now conducting a forensic audit at city hall. Money was missing from several areas, and vendors at the Hamilton Farmers Market have been asked to co-operate with the investigation.

Clark was surprised to learn employees were handling cash from the farmers market. City auditor Ann Pekaruk told Clark that it is already policy to avoid cash payments.

But every group of services across the city, such as museums and recreation centres, have their own set of rules in terms of how they process payments.

"Some have a POS (point of sale) system. Some have an old fashioned cash register. Some of them have a box underneath the counter," she said.

"One of the things the forensic auditor of this particular situation has been charged with is providing input into areas where we see we have weaknesses or where we can improve best practices."

The fired worker is grieving his dismal through the Canadian Union of Public Employees's Local 5167.

The missing amount works out to just over $9,000 per month over a nine-year period.