A forensic audit of Ford's 2010 election campaign finances determined he "overspent during his campaign by $40,168" — an apparent contravention of the Municipal Elections Act.
The audit was based on allegations Ford's 2010 campaign exceeded the $1.3 million limit and that he broke the law by borrowing about $77,000 in campaign expenses from his family's company.
A three-person panel will now analyze the violations under the Municipal Elections Act and may bring in a special prosecutor.
The residents who requested the audit — Max Reed and Adam Chaleff-Freudenthaler — said in a statement on Friday that they will call on the committee to proceed with prosecution.
If the case is brought to a prosecutor, non-criminal charges would be laid, and a conviction could result in penalties ranging from fines to Ford's ouster from office.
Last Friday, Ontario's Divisional Court overturned a previous decision that ordered Ford removed from office for violating conflict of interest rules.
Ford's brother, Coun. Doug Ford said they disagree with some of the auditor's findings, but added "I feel they were very fair."
"Our interpretation is totally different; 100 per cent different" on a couple of expenses, Doug Ford said.
Earlier in the day, the mayor's brother got in a heated exchange with one of the mayor's strongest opponents — Coun. Adam Vaughn.
"Why don't we do a forensic audit on Adam's file? Why don't we do a forensic on all the left? Why is it centre-to-right folks are being audited around here?," Doug Ford asked.
"You got allegations? Bring it on," Vaughn replied.
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