Toronto council is being asked to take over management of the Sony Centre and dissolve its board after an audit uncovered multiple sole-source deals and missing documents in connection with the multimillion-dollar renovation of the city-owned theatre.

The city's audit committee voted unanimously to ask council at its June meeting to install an interim board comprised of three of the city's most senior managers, and three councillors. The committee recommended that two councillors who are now on the board, Gary Crawford and Pam McConnell, be on the interim board, which would stay in place until after the fall election. It would replace the current group of eight citizen directors and four councillors that now oversees the theatre's operations.

The surprise move on Tuesday highlights the issue of accountability at the city's numerous arm's-length agencies – organizations that often conduct their business out of the public spotlight. Toronto's Auditor-General found several instances where the theatre's management did not follow city rules – including incomplete records, failing to tender major contracts and accepting donations from a developer during the negotiations on a deal.

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The cost of the theatre's makeover, which ballooned from $28.5-million to more than $40-million, was to be financed by the sale of development rights for a 57-storey condo tower. About $4-million in work still needs to be done, but the money from the condo deal has been spent and the city is on the hook for as much as $10-million, the audit found.

The Sony Centre's CEO, Dan Brambilla, who will leave his post at the end of June, disputes those findings. He sat silently at Tuesday's meeting and refused to talk to reporters.

"I believe I have been treated very unfairly," he said in a written response to questions from The Globe and Mail. "Just look at today's meeting where I was available to answer questions so they could hear my side of the story and yet every councillor studiously refused to ask me even one question."

City manager Joe Pennachetti said the committee's action, if approved by council, will allow him and his staff to step in quickly to "protect taxpayers' dollars."

He stressed that the problems found at the Sony Centre are not widespread. "I was asked as city manager, do you believe this would occur within the city today? I wouldn't. It was a surprise to me," he told reporters.

Councillor Shelley Carroll said she and other members of the audit committee decided they needed to act quickly because of the serious nature of the auditor's findings – both those made public in his report and others that came to light during a lengthy closed-door session.

"I did not come in expecting to do this," said Ms. Carroll, who spent the lunch break with some other committee members researching what action they could take.

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"I think residents of the City of Toronto expect there to be a serious consequence when there are findings of that nature from the Auditor-General, and I think that we're acting really on the behalf of the citizens of Toronto here. The Sony Centre is their asset and we are moving to protect that property," she said.

She said the committee believed it had to act quickly because the term of council is nearing its end and because the present board is in the process of selecting a new CEO.

There was "no confidence" the board could make that selection, she said.

With files from Ann Hui