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Brampton Mayor Susan Fennell listens to discussion on a forensic audit into her and councillors expenses at a city council meeting on Aug. 6, 2014.J.P. MOCZULSKI/The Globe and Mail

When Brampton Mayor Susan Fennell was told she improperly spent more than $100,000 by the city's integrity commissioner and a third-party auditor, she threatened to sue them. After a report by an arbitrator said on Friday that Ms. Fennell misspent just a fraction of that amount, she declared herself "exonerated."

Arbitrator Janet Leiper has asked the mayor to reimburse the city $3,522.97, just one-tenth of the amount Deloitte Canada said she needed to repay. Ms. Fennell's use of flight passes – which allowed for more flexible travel, but at a higher cost than economy tickets – was central to the controversy over her spending. But Ms. Leiper said the city's expense policy was worded in such a way that Ms. Fennell's use of the passes is allowed.

"While it may be accurate that a higher level of flexibility and administrative convenience meant that the cheapest fares at all times were not being purchased, this was not what the policy required," she wrote.

She wrote that the policy does not say what it means by "regular economy rate" and does not deal with the issue of flight passes.

At a news conference on her front porch, Ms. Fennell celebrated the report's release.

"My name is now cleared once and for all," she said.

Council gave the results of an audit by Deloitte Canada to police this summer. In September, the anti-rackets branch of the Ontario Provincial Police launched an investigation into spending by the mayor and other councillors to determine whether they had committed any crimes. The investigation is still under way, OPP Sergeant Peter Leone said. When it is completed, the OPP will report to Peel Police.

For more than a year, Ms. Fennell has painted herself as the victim of a "witch hunt" by political opponents and the media, who called for her resignation after reports of lavish spending on air travel and hotels. The mayor rejected the Deloitte forensic audit, which asked her to pay back more than $34,000. The city's integrity commissioner, Robert Swayze, released a report that also found fault with her for buying flight passes. After threatening legal action against both Deloitte and Mr. Swayze, who she said "exceeded their mandates," Ms. Fennell proposed the city introduce a dispute resolution process so she and other members of council who had been found to have misspent public funds could argue their cases. Council voted in favour of this process, which resulted in Ms. Leiper's report.

The $3,522.97 Ms. Fennell is on the hook for includes the price difference between a business-class flight she bought in 2007 to go from Toronto to London and the cost of an economy ticket. It also includes the price difference between a premium hotel room she booked in Victoria for the Federation of Canadian Municipalities meeting in 2009 and the cost of an economy room.

Although she won the past three elections with strong mandates – capturing half of all votes cast in 2010 – Ms. Fennell has been lagging behind challengers Linda Jeffrey, the former minister of municipal affairs, and John Sanderson, a fellow member of council, in the mayoral race.

After Ms. Fennell's news conference, Ms. Jeffrey focused on what previous reports had concluded.

"While Susan Fennell may want us to think she has been vindicated, the fact is that an independent forensic audit by Deloitte and a ruling by the Integrity Commissioner have shed light on serious issues at Brampton's City Hall," she said in an e-mail.

Mr. Sanderson held his own press conference an hour after Ms. Fennell's. In a release, he said Ms. Leiper's report was not the end of the expense scandal for Ms. Fennell.

"There is no way the Brampton taxpayer is going to pay for Susan Fennell's irresponsible jet-setting lifestyle on my watch. Her highly paid Bay Street lawyers can argue all they want, but Council will decide what Ms. Fennell owes back to the hardworking taxpayers of Brampton."