A third-party audit of Rob Ford's 2010 campaign expenses has found that the mayor exceeded the spending limit by $40,168 in an apparent contravention of the Municipal Elections Act.

Ford's total campaign cost was about three per cent over the limit of $1,305,066.65 placed on mayoral candidates.

“Contributing factors to this excess included unrecorded expenses resulting from contributions in kind and the re-allocation of the costs of certain events previously treated as fundraising,” the audit states.

The city's compliance audit committee will now decide whether to pursue non-criminal charges against Ford under the Municipal Elections Act.

Possible penalties include removal from office and being banned from seeking public office in the future, however such heavy-handed sentences are rare in Ontario.

In addition to finding that Ford exceeded the campaign spending limit, the audit also found that Ford improperly borrowed about $77,000 from his family business and accepted several donations that were above the allowable amount under the Municipal Elections Act.

Speaking at a media scrum at city hall shortly after the findings were released, Coun. Doug Ford described the audit as "fair."

“I think they did a good job,” he said. “We had absolutely nothing to hide, whatsoever.”

Deputy Mayor Doug Holyday told CP24 that the audit didn't unearth anything the mayor's office wasn't expecting.

"The numbers are what were expected," he said.

Mayor Rob Ford has yet to comment on the findings.

The audit was undertaken following a complaint by Toronto residents Adam Chaleff-Freudenthaler and Max Reed.

In a statement issued Friday afternoon, Chaleff-Freudenthaler and Reed said that based on the audit’s findings, they would be requesting that prosecution against Ford proceed “in a timely manner.”

“The audit revealed more than 100 apparent contraventions of the Municipal Elections Act,” the statement reads. “Additionally, the auditors found that Ford, in apparent contravention of election laws, accepted corporate donations, received a loan from Ford's family company and began spending money before the campaign was legally permitted.”

Councillors butt heads ahead of audit release

Earlier on Friday, two city councillors got into a heated exchange inside city hall prior to the release of the audit.

"Cheating in an election is a very serious allegation and if you cheated to get elected it calls into question whether or not you should hold office," Coun. Adam Vaughan told reporters Friday morning. "That’s why one of the penalties is removal from office."

Vaughan’s comments led to an impassioned outburst from Coun. Doug Ford, who stood in front of the cameras outside the mayor’s office later in the day and made his case while the left-leaning councillor and staunch Ford critic looked on.

“For him to say that we are cheaters - that’s a big issue for me,” Ford said. “I got an idea - why don’t we do a forensic audit on Adam’s file? Why don’t we do a forensic audit on all the left? Why is it that folks on the right are the only ones getting audited here?”

“Bring it on, bring it on,” Vaughan replied.

The only other campaign expense audit conducted during this session of council found that Coun. Giorgio Mammoliti, a former member of Ford’s executive committee, spent $12,065 more than he was allowed during his 2010 election campaign.

The city’s three-person compliance audit committee still hasn’t decided whether they will pursue charges against Mammoliti under the Municipal Elections Act.

Speaking with CP24 following his dispute with Vaughan, Ford said councillors are being targeted based on their political ideology.

"What is disturbing to me is how the centre-to-right councillors are being targeted," he said. "They are doing this because they can't beat Rob at the polls. They are going after him because he outsourced garbage east of Yonge Street, they are going after him because he is cutting down on staff and they are going after him because he is making sure everyone is accountable and transparent."

Friday's war of words that erupted between Vaughan and Ford is nothing new.

During a November council meeting Ford accused Vaughan of conducting a “shake down” when he negotiated $1 million in Section 37 funds from a developer interested in building a project along Queen Street West.

Section 37 of the Planning Act permits the city to authorize increases in permitted development height and density in return for money to provide community benefits to the area.

“Adam you shouldn’t talk when you are making deals for a $1 million by yourself,” Ford said Friday, alluding to the deal.

“It was totally legal,” Vaughan snapped back.

“I know it was totally legal,” Ford said. “You and a developer sitting in your office by yourself?”

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