A fraud and waste hotline created by the City of Toronto five years ago is proving to be an effective whistleblower tool, a report says.

The city document reveals less taxpayer dollars are being wasted through the fraud attempts of residents and businesses.

Last year, the city recovered more than $83,000 in losses, a substantial amount considering Toronto was ripped off about $346,000 the year prior.

The hotline received 503 complaints in 2006. Of those, 39 were valid.

One investigation found a city employee had stolen $20,000 over a four-month period. That person was fired and convicted in criminal court. All the money was recovered.

The hotline also led to the dismantling of an unauthorized aquatic program, of which 80 people had been registered. The supervisor was fired and money was returned to the swimmers.

The city also closed two cases from previous years. One involved the tampering of water meters at several large apartment buildings. As a result, $325,000 in lost revenue was recovered.

Councillor Karen Stintz says the figures show the system -- which was implemented in 2002 -- is working.

"I think it does demonstrate that we have ... measures to make sure that these kinds of things don't happen," said Stintz, who is on the audit committee.

Toronto is the first Canadian municipality to have the fraud and waste hotline, which makes itself more transparent.

Officials say the hotline's success it not only measured by the amount of money recovered, but also by the prevention of future losses.

With a report from CTV's Desmond Brown