PEORIA, IL - At last, an explanation for those strange expenses on the Peoria School District 150 credit cards, used to buy iPads, beauty supplies, gift cards, luxury hotel rooms and tons of food. But don't call them credit cards, since they are paid off at the end of the month. They're called P-cards, or purchase cards now.
Two District 150 administrators who monitor the cards explained their use to the School Board on Oct. 15.
Mike McKenzie and Carla Eman oversee the cards, which amounted to only 3.5 percent of the district's purchases in August, they said. They question inappropriate purchases, and may overlook the payment of sales taxes at times even though the district is exempt from paying sales taxes.
Users may be in a hurry, or "when you buy on line, you can't get tax exempt, and it's still cheaper that way," McKenzie said. And the cards send rebates to the district, though he didn't say how much that amounted to.
They've seen no inappropriate use, no abuse of the cards, and the school district's auditors are "not concerned," he said.
He may as well have said 'move on, nothing to see here.'
Here is the presentation on the cards:
But some expenditures on the cards raise issues that were not addressed.
In the public comment period activist Sharon Crews, who has done most of the research into the cards through the Freedom of Information Act, said they allow administrators to circumvent district policies. Her written remarks will be added below later.
For example, Supt. Lathan purchased two $500 gift cards, from Office Max and WalMart, and nine $50 gift cards as well. There are no records of how these cards were used, Crews said, even though district policies call for detailed records on all purchases including who used the items.
"I feel some of the purchases are not job related," she said. Then there are "creature comforts" for administrative offices, such as $500 chairs after $98 chairs were bought then rejected and sent to underlings in the district.
This sort of card purchasing also seems to circumvent bidding requirements. Some of the card documents list many individual books of the same title, iPads and other items that perhaps should have been bid.
"I do not know how an outside investigator would view this" Crews said. "I believe an investigation is warranted."
But Crews said her main concern is spending on things that seem to have little to do with education of children.
Activist Terry Knapp and I also called for an independent outside investigation. That means someone other than the administrators and even the auditors answering to those who can fire them from their jobs. (Does anyone remember the auditors in the Enron scandal?)
I also questioned the expensive hotel rooms and meals for travel, noting that I've been told people who travel on state of Illinois business have daily costs capped, but that's apparently not required in District 150.
Lathan responded that people who attend workshops must stay in the hotels used for the events.
Here is the recording of the public comments:
-- Elaine Hopkins
Here are the comments from Sharon Crews:
I am pleased with cosmetology’s return to District 150’s course offerings. However, using Dr. Lathan’s District credit card to buy supplies seems inappropriate.
Policy “Prohibits a card’s use by anyone other than the individual to whom a card is issued.” Lathan circumvented that policy by charging two $500 gift cards for Office Max and Wal-mart. The cosmetology instructor did purchase supplies. In August, 2012, Lathan purchased nine $50 gift cards from Sally’s Beauty. Who received those cards and what was purchased? No receipts were given to me.
Policy reads “How to document purchases, including the need to: (a) present an itemized receipt, (b) indicate the date, purpose and nature of the charge on the receipt, and (c) identify the names of individuals for whom expenditures were incurred on the receipt. Policy clearly expects the charge card holder to write data on the receipt.
All supplies should have been ordered through the purchasing department, if it still exists, and inventoried. Policy reads, “The Superintendent is responsible for developing and maintaining an inventory of District buildings and capital equipment. The inventory record of equipment shall include such items as a description of each item, the quantity, the location, the date of purchase, and the cost or the estimated replacement cost.” I assume that there should be a record of smaller, less expensive items, also.
Have all cosmetology items been recorded on an official inventory sheet with the required information? I do not know how an outside investigator will view the types of expenditures on the charge card.
The policy states that these cards should be used “to simplify the acquisition, receipt and payment of purchases and travel expenses incurred on the District’s behalf and “used for those expenses that are for the District’s benefit and serve a valid and proper public purpose; they shall not be used for personal purchases.
Charge cards are absolutely necessary for travel. I do question the valid purpose of three tickets at $123 each for a World Natural Hair Health and Beauty Show in College Park, Georgia. Also, the names of individuals who used the tickets are not written on the receipts as required by policy.
Policy reads that credit cards may only be used to pay certain job-related expenses or to make purchases on behalf of the Board or District or for purposes that would otherwise be addressed through a conventional revolving fund.” I am not certain what is meant by conventional revolving fund, but I feel that some purchases are not directly job-related. A $40 Jeffery Allen easel in Lathan’s office comes close to being personal. When are creature comforts in the office considered personal? Five Best Buy bags at $60 each for District-provided Ipads are maybe too expensive or even unnecessary as an office perk. Sorry, but I believe an investigation is warranted. Another major issue is the taxes paid when the District has tax exempt privileges.
Policy states that “Cardholders must submit the original, itemized receipt to document all purchases.” There might be a few missing receipts for cosmetology and food-related expenditures for which I am double-checking. Since I have requested very few receipts, others could be missing. I believe an investigation is in order. I don’t want to blindside any of you. While allowing such indiscriminate charging could lead to misuse, my main concern is with too much spending on things the District doesn’t really need. I fear the Education Fund has been hit hard.
As an aside that I can’t resist. I learned that chairs for the board room were ordered and received from Overstock.com and that those $98 chairs weren’t to your liking, so they were passed on to some Wisconsin Avenue underlings and your lovely $500 chairs were purchased.
Dr. Lathan purchased 10 copies of the book How Did This Happen? Holding People Accountable for Results the Positive, Principled Way. That is exactly what we are calling for—accountable and principled spending.-30-
Here's the Journal Star story on the meeting.