The head of the city's payroll office was suspended without pay Thursday, following a massive fraud bust involving city contractors.
Mayor Michael Bloomberg and City Comptroller Liu announced that Joel Bondy, the executive director of the Office of Payroll Administration, was suspended effective immediately.
Bondy had been in charge of implementation of the new CityTime payroll system.
On Wednesday, investigators charged four outside consultants and two others with stealing $80 million in taxpayer money, allegedly using phony billing schemes and other methods.
In the wake of Bondy's suspension, Deputy Mayor Stephen Goldsmith will have direct oversight of the CityTime payroll system.
The mayor said any violation of the public's trust is unacceptable and the city will do everything possible to ensure any taxpayer dollars that were fraudulently distributed are recouped.
Meanwhile, union leaders are demanding an investigation into the city's alleged outsourcing problems.
Michael Mulgrew of the United Federation of Teachers and Uniformed Firefighters Association President Stephen Cassidy were among those rallying on the steps of City Hall Thursday.
The demonstrators said the fraud charges prove that privatization of government operations does not work, and that too many unionized workers are losing their jobs.
"We want to call the mayor on this, and say, 'Look, stop the layoffs, don't lay off any more people, stop contracting out.' And let's turn around and look at what's really going on," said President Harry Nespoli of the Municipal Labor Committee.
"We are calling that there will be investigations, real investigations, into all of these contracts and the whole contracting process, which is just ripe, ripe for corruption and waste," said Mulgrew.
"This is an administration that says they have to lay off workers, close firehouses, reduce services when they won't look at the problems they've created for the citizens of New York City," said Cassidy.
The CityTime system was originally developed to eliminate payroll waste and abuse.