City of Toronto staff stealing packages, working other jobs on sick leave: auditor general report

Thousands of dollars in missing packages from mailrooms, a metropolis employee taking weeks of paid sick provide to act another book of job and a retiree's credentials existence used to attempt multi-million-dollar fraud are just some of the highlights in an annual report from Toronto’s auditor general being presented Thursday.

Several employees involved in examples laid out in the auditor general’s report on the fraud and waste hotline no longer work for the city and are ineligible to be rehired. The annual report will be presented to councillors Thursday at the audit committee.

The impact of fraud goes deeper than just financial losses, Tara Anderson, the city’s auditor general, writes in her report.

“Wrongdoing perpetrated in the workplace can damage employee morale and can negatively impact the organization’s reputation,” Anderson wrote. 

The fraud and waste hotline was established in 2002 as a way for city councillors, employees and Torontonians to report allegations of fraud or mismanagement. The most common substantiated complaints submitted in 2025 include subsidy fraud, irregular benefit claims and time theft, Anderson writes. 

The Cost of Fraud in Ontario

Last year, the office investigated two substantial frauds each involving more than a million dollars. 

In June, the auditor general’s office released a report that outlined an attempted electricity fraud. The City of Toronto was nearly swindled out of $2.5 million in 2019, when a retired city employee's credentials were used to sign contracts with third-party energy retailers instead of with Toronto Hydro.

In December, Capital Sewers Services Inc. Received a five-year ban from bidding on the City of Toronto's work after a forensic audit uncovered it intentionally overbilled the city more than $1 million. 

While the report lays out those costly misuses of public dollars, it also delves into relatively smaller investigations involving city employees.

One of the examples is $21,100 worth of packages that went missing from mailrooms at city facilities over two years. In total there were more than 20 packages containing electronic devices that disappeared, the report says.

An investigation by the city division that reported the items missing was able to solve part of the mystery. It found “on the balance of probabilities” that a city employee stole three packages with electronic items from two city facilities, with an estimated total value of $2,300. 

“The employee is no longer employed with the city and is not eligible for rehire,” the report says. 

But the division investigating couldn’t pin the remaining $18,800 in missing items on that employee, leaving their fate unknown. The division involved has since implemented measures to deter theft, like new safes and a barrier to limit unauthorized access.

How Ontario's Serious Fraud Office is trying to tackle fraud

The report also highlights two investigations into employees working other jobs while employed by the city. In one instance, an employee collected three weeks of sick pay — resulting in an estimated loss of $3,200 — while working another job. 

That employee resigned and can’t be rehired. The city got the money back. 

In the other instance, an investigation found a city employee was doing business for their own company during work hours. The person admitted their work involved other government clients. 

“As such, they could have benefitted from the confidential information obtained during their employment with the City as their personal business involves the same type of duties,” the report reads. 

The employee was fired and can’t be rehired. 

One of the costlier examples of employee wrongdoing was identified by a program that detects fraudulent benefits claims. 

According to the report, one employee submitted 85 claims where no services were provided and four claims that weren’t supported, totalling about $14,900 in benefits. The employee ultimately repaid the city and resigned during the investigation.

Reporter

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