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Liu says contractor Hewlett Packard was unqualified to work on the upgrade of the world's largest emergency communications system and may have overbilled the city by as much as $163 million.

The comptroller says Bloomberg officials disregarded warning signs before hiring HP seven years ago and then for years failed to keep track of cost overruns and suspicious employee payouts.

"And look at carefully at the $163 million that we've identified that the city can and should try to recoup. One-hundred-and-sixty-three-million dollars is a lot of money and we sure could use this, especially as they are still talking about significant cuts to services," Liu said. "Cuts are being discussed every day and we should be doing all we can to recoup these badly needed funded."

One timecard, for instance, shows a worker was paid $192 an hour to "kill a waterbug" and "help contain sewer odor."

As part of the efforts to modernize the 911 system, the city has opened a new call center in Brooklyn but one in the Bronx has yet to be completed.

City officials say there are no overruns and the contract is actually $34 million under budget.

"The comptroller's audit has three primary conclusions, none of them true. This is a case where, I think that the, the story is not going to, that the facts are not going to get in the way of the story line," said Deputy Mayor Cas Holloway.

The deputy mayor says major work on the Bronx center was not part of the original HP contract, and while he concedes that HP's performance was not always great, he says city officials hauled its executives in and got them to change.

As for the suspicious payrolls, Holloway says the city voided 6,000 hours and will probe more.

City Hall officials also say that lost in all the controversy is real progress: a new 911 system that finally links cops and firefighters at the other end of New Yorkers' calls for help.

"It's something mayors have tried to do for decades," Holloway said.

Liu is seen as wanting to be the next mayor, and he raised eyebrows by surrounding himself on Wednesday with labor leaders during what is typically an official event. He denied politics was at play.

The comptroller is asking Manhattan District Attorney Cyrus Vance Jr. to review the case for possible criminality. Vance's spokeswoman declined comment.