The following was published Oct. 9, 2011 in Crain’s Chicago Business.
Consumers who engage in credit card abuse and overspending have some company in the public sector: the city of Chicago and many of the area’s suburbs.
Recent investigations by the Better Government Assn. and its media partners have exposed blatant and widespread credit card abuse, misuse and shoddy record-keeping at city agencies and some suburbs. Cards are being used helter-skelter to pay for expensive and questionable out-of-town travel, lavish staff parties, entertainment and even high-school tuition for the child of a government employee.
The BGA applauds Mayor Rahm Emanuel’s recent decision to impose restrictive credit card and reimbursement policies on City Hall and its agencies. Now it’s time for other municipalities to follow his lead and crack down on credit card abuse and mismanagement by their officials. That scrutiny should apply to every alternate payment system, including the debit and procurement cards that are becoming increasingly important to municipalities.
Chicago makes the big news, but suburbs are equally guilty of abusing government-backed plastic.
In County Club Hills, an investigation by the BGA and WGN-TV/Channel 9 found the mayor used the suburb’s credit card to pay for thousands of dollars in restaurant meals, to purchase show tickets and to go on personal shopping sprees. The mayor says he was just lobbying, but his city council wasn’t pleased and decided to pull his card anyway.
In Maywood, the local housing authority’s credit card was used by staff and board members on a number of “questionable” and “unallowable” purchases, including meals, hotel stays, flowers and other items that failed to include the receipts that federal housing officials require, according to a BGA investigation.
In Grayslake, school board officials are shoring up oversight of procurement cards, which were used in more than $800,000 in purchases over two years, according to a BGA/Daily Herald review.
In Chicago, Mr. Emanuel’s latest directive comes after a Freedom of Information Act request revealed that the number of city-backed credit cards stood at 500: He cut that number to eight.
Chicago Park District and Chicago Housing Authority credit card records revealed enough questionable spending by top agency officials to precipitate a shake-up that included resignations.
The mayor’s latest credit card crackdown installs some of the controls already in place in the private sector but not, unfortunately, in government, including: limiting the number of cards; reviewing expenditures regularly; requiring receipts; standardizing reimbursement policies and, most of all, just keeping an eye on the books. All of that can help nip trouble before it gets out of control.
This is the proper course to take.
Remember, it’s the taxpayers who ultimately pay the tab when those mammoth municipal credit card bills come due.
