Toronto city staff are at the centre of multiple fraud and misconduct investigations outlined in a new report from the city’s auditor general, which details $4.5 million in financial losses in 2025 alone.
The report, released late last month and presented to committee on Thursday, summarizes complaints received through the City of Toronto’s Fraud and Waste Hotline and directly from municipal divisions. Among the key findings is an electricity scam that exposed the city to a potential $2.5 million loss.
Of the $4.5 million confirmed losses last year, $4.4 million was connected to a division that administers subsidies funded by other levels of government. The auditor general also reported that $9,000 was recovered and $38,000 in potential losses were prevented in 2025. Over the past five years, total losses reached $6.3 million, while recoveries and avoided costs exceeded $4.7 million.
The Fraud and Waste Hotline, established in 2002, allows employees, councillors and members of the public to report suspected wrongdoing without fear of retaliation. Since its creation, the hotline has handled nearly 15,350 complaints.
One major investigation involved a city vendor accused of altering subcontractor quotations through the change order process. Five complaints were submitted through the hotline.
External audits found that a senior management team member was responsible for the intentional overbilling of at least $1.1 million. The case was referred to Toronto police. The employee is no longer with the company, and the vendor has been suspended from bidding on city contracts for five years. The city is working to recover the funds.
The report also highlights several cases involving Toronto city staff and employees of city funded organizations.
In one instance, an employee used public funds to purchase approximately $53,600 in unauthorized gift cards from retailers not approved under the city’s funding agreement. The full amount was recovered.
Another probe examined the disappearance of more than 20 mailroom packages valued at about $21,100. Investigators concluded that a city employee stole at least three packages worth $2,300. The employee is no longer employed and is not eligible for rehire.
An additional case involved a city worker who admitted to selling city issued personal protective equipment online and wearing non approved PPE while on duty. The employee received a 10 day unpaid suspension.
The auditor general also reported $14,900 in falsified employee benefit claims, which were repaid in full, and a case in which a city employee collected sick pay while working a second job, resulting in a recovered loss of about $3,200.
