Item - 2019.EA4.2

The Compliance Audit Committee:

Granted the application for a compliance audit.

1. The Compliance Audit Committee met on July 24, 2019 to hear Item EA4.2, the Compliance Audit Application of Roland Lin for a compliance audit of the Election Campaign Finances of the Respondent, Jim Karygiannis.

2. The Applicant appeared before the Committee and provided submissions related to the Application.

3. The Applicant provided information to the Committee to support the Applicant’s belief that the Respondent contravened provisions of the Municipal Elections Act, 1996 relating to election campaign finances.

4. The Applicant raised several concerns relating to the Respondent’s compliance with the Act, including the following: a. honoraria paid to the Respondent’s supporters in the amount of $81,000.00, particularly since the Respondent acknowledged in the media that the payments were associated with the transition from 44 to 25 wards; b. the Respondent misclassified a voter appreciation event as a fundraising event; c. the Respondent received a discount of $375.00 on entertainment provided by Sammy Cheng pursuant to an invoice dated September 9, 2018, which was not reported as an in-kind contribution; and d. the Respondent paid $5,000.00 to Living Stone Assembly Church and classified same as a Voter Appreciation Expense but did not file supporting documentation, and accordingly it is uncertain whether the expense is properly classified as a Voter Appreciation Expense or whether it should be subject to the General Spending Limit.

5. The Committee then provided the Respondent’s counsel with the opportunity to respond. The Respondent’s counsel did not address the substantive arguments put forward by the Applicant. The Respondent’s counsel submitted that the application should be denied for the reasons stated in his letter dated July 24, 2019 and filed with the Committee. The Respondent’s counsel made brief submissions thereon.

6. The Committee concluded that there are reasonable grounds that:

a. The Respondent misclassified honorarium payments in his audited financial statement, which if properly classified would have exceeded the General Spending Limit;

b. The Respondent misclassified a voter appreciation event as a fundraising event, which if properly classified would have exceeded the Voter Appreciation Spending Limit; and

c. The Respondent failed to report a discount received on services from Sammy Cheng as an in-kind contribution; and

d. The Respondent did not provide supporting documentation in order to ascertain whether an expense paid to Living Stone Assembly Church was properly classified as a Voter Appreciation Expense as opposed to being subject to the General Spending Limit.

7. For the reasons stated above, the Committee shall appoint an auditor to conduct a compliance audit of the election campaign finances of Jim Karygiannis, in accordance with s. 88.33(10) of the Act.

The Compliance Audit Committee appointed MNP LLP to conduct the audit of the election campaign finances of Jim Karygiannis.

The Compliance Audit Committee recessed its public session to meet in closed session to deliberate in private on Item EA4.2 - Compliance Audit Application by Roland Lin for the Election Campaign Finances of Jim Karygiannis and to receive advice that is subject to solicitor-client privilege.

Application for a Compliance Audit received June 25, 2019, from applicant Roland Lin for candidate Jim Karygiannis for City Councillor Ward 22 Scarborough-Agincourt.