The three-member audit committee voted 2-1 to clear Ford of several allegations, including overspending by $40,168 during his 2010 mayoral campaign.
A compliance audit had also suggested Ford borrowed about $77,000 from family businesses without paying interest, might have accepted donations higher than the limit and left some contributions unreported.
Ford's lawyer, Thomas Barlow, argued that legal proceedings would not be in the public interest due to the low chance of a successful prosecution and the likelihood of a low fine if Ford was found guilty.
The fine for violating the Municipal Elections Act can be as high as $25,000.
When Hamilton mayor Larry Di Ianni was found to have violated the Municipal Elections Act in 2006, he paid $4,500 fine and was ordered to write an essay for Municipal World Magazine.
Barlow said that using taxpayer dollars to launch a prosecution with such little gain would not be beneficial.
"I am very pleased with the compliance audit's decision. I'm glad that the process is finally over," Ford told a news conference after the audit hearing.
"Finally, I can say to the people who donated to my campaign that your rebates will be in the mail shortly," he added.
Rebates for donating to Ford's campaign had been halted in light of the audit.
Ford avoided being thrown out of office last month after successfully appealing the ruling that found him guilty for breaking conflict of interest laws back in 2009.
The audit committee voted earlier this month to begin legal proceedings against former Ford ally Coun. Giorgio Mammoliti for allegedly overspending roughly $12,000 in 2010.
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