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Alain Lalonde said it was city council's decision to top up his pension and all the rules were followed. ((CBC))

The City of Ottawa's fraud and waste hotline has received a complaint about the auditor general — the person responsible for keeping the city accountable to taxpayers.

Alain Lalonde, who is normally responsible for investigating such complaints, confirmed the hotline has already received one complaint about a $104,000 pension top-up he received from the city. But he remains unapologetic about requesting and accepting the money.

"At the end of the day, it was a decision of council, and nothing in the process was broken, so the rules were followed," he said.

He added that since the complaint involves him, he cannot investigate it and has forwarded it to management for handling.

Lalonde worked for the federal government before becoming the city's auditor general in 2004. 

He eventually decided to transfer his federal pension to the pension fund for City of Ottawa employees. In the process, he made some extra payments to cover months when he hadn't paid into either pension. He also had to pay a sum to make up for the lower value of his federal pension compared to the municipal pension at the time the transfer went through.

'It was a very bold move ... especially given the role that he plays with the city — it's ironic."'— Nathalie Houle, pension specialist

Lalonde requested a refund for those payments and the income taxes he paid on them. They were approved by city councillors late in 2009.

Since then, in addition to the hotline complaint, the city has also received at least one complaint by email. It was sent by Ottawa pension specialist Nathalie Houle, who also plans to make a separate complaint through the fraud and waste hotline.

"He should never have asked for the money and he never should have gotten it," Houle said Wednesday. "It was a very bold move to even consider the fact that he should ask for the money, especially given role that he plays with the city — it's ironic."

Precedent set

Houle often deals with pension transfers in her job with the human resources department of a Crown corporation. She worries Lalonde's move could open the floodgates to similar requests from other employees.

"They have every right to request the same thing, and the city would be hard pressed to say no. The precedent has been set."

She wants Lalonde to pay the money back.

A number of city councillors told CBC News this week that they made a mistake in approving the payout. Some said they didn't really understand what they were voting for.

Coun. Diane Deans, who voted against the top-up, believes the money won't be recovered unless Lalonde voluntarily decides to return it.

"Once the decision is made," she said, "it's very difficult to take it back."