Toronto’s auditor general has uncovered allegations of fraud involving city employees, including claims of stolen packages, resold protective equipment, and the misuse of sick days to work a second job.
The revelations were detailed in a report published late last month that went before committee on Thursday. It outlines some of the work done by the AG’s office last year, including an investigation into an electricity scam which could have cost the city $2.5 million.
Based on the complaints it received and investigated in 2025, either through its anonymous Fraud and Waste Hotline or from a city division directly, the report points out that Toronto lost $4.5 million last year, although $4.4 million of that loss was linked to a division that administers subsidies provided by other orders of government.
At the same time, the report noted, Toronto recovered $9,000 and avoided potential losses of $38,000 as a result of those complaints. Over the past five years, actual loses totalled $6.3 million, but recoveries and avoided costs were more than $4.7 million.
The city established the hotline for employees, councillors, and members of the public to report allegations of fraud, waste, or other wrongdoing, without fear of retribution in 2002. It’s handled nearly 15,350 complaints since then.
The report outlined a handful of the complaints it received in 2025. Here are some of the highlights:
Vendor overbilled city by $1.1 million
The AG’s office said it received five separate complaints through its hotline about a city vendor with “multiple” Toronto contracts that was altering subcontractor quotations through the “change order process” (an amendment to an existing contract).
Both the division responsible for the contract and the vendor performed external audits to address the alleged fraud, and found that a senior management team member of the unnamed company was behind the “intentional overbilling” of at least $1.1 million.
The matter was referred to Toronto police and the vendor confirmed to the city that the employee is no longer with the company. The division is working to recover the funds. The vendor was suspended from bidding on, or being awarded, city contracts for five years.
$53,000 spent on gift cards by employee
In another instance, the AG’s office received a tip from an unidentified division that an employee of an organization funded by Toronto was buying gift cards with city money.
“It was concluded that the former employee made unauthorized gift card purchases from unauthorized retailers with no evidence of the gift cards being provided to clients, but was claimed under the City of Toronto’s funding agreement,” the report read.
The AG said the employee left the organization before the fraud was discovered. The city’s financial loss was roughly $53,600, but the division was able to recover the entirety of the funds.
City employee steals $2,300 worth of packages
An investigation was launched by the AG after it was informed about more than 20 mailroom packages that had gone missing or were unaccounted for over a two-year period. The value of the products, mostly electronic items, was approximately $21,100.
The investigation found that, more likely than not, a city employee stole at least three of the packages valued at a total of $2,300. The division said it could not conclusively tie the remaining missing items to the employee.
The employee is no longer employed with the city and not eligible for rehire, the report read.
City-issued PPE sold online
An anonymous complaint led to an investigation into a Toronto employee who was selling city-issued personal protective equipment (PPE) online.
“The Division led an investigation and the employee admitted to: posting the PPE online for sale; selling the PPE; and wearing PPE that was not City-approved or supplied while working,” according to the report.
The investigation could not determine if the sale of the equipment, valued at $350, resulted in “personal gain” for the employee. However, it was concluded that the action was inappropriate and not acceptable.”
The employee was suspended for 10 days without pay.
Benefit fraud totals $14,900
In one of two instances of employee benefits fraud, the AG said a benefits administrator reported the submission of “falsified and unsupported” claims by a city worker.
An investigation was launched, and found that the employee had submitted 85 claims where no service was provided and four additional claims that were not supported.
The fraud would have cost the city $14,900, but the employee repaid the amount in full. They later resigned.
City employee used sick days to work second job
A complaint was submitted to the AG about a city employee who had been “inappropriately” using sick days to work a second job.
Following an investigation, it was determined that the employee had been absent form work for roughly three weeks, and during that time was employed by another employer and collecting sick pay from the city.
This resulted in an estimated loss of approximately $3,200, the report noted. The division that reported the fraud recovered the entire loss.
The employee resigned.
In a statement to CTV News Toronto, the city said it takes the report seriously and is taking action to “reinforce a culture of accountability, transparency, and continuous improvement across the organization.”
“We are working with the Auditor General on an action plan to prevent these issues, and have already improved mailroom tracking, oversight measures, and system access controls. We remain fully committed to protecting public resources and addressing the issues identified in the report,” a spokesperson for the city said in an email.
