Tag Archives: better government association

Daily Herald Op-Ed: Best Practices for Government Use of ‘P-Cards’

The BGA’s Policy & Government Affairs Coordinator, Emily Miller, shines a light on procurement cards, or p-cards, which are taxpayer-financed debit cards issued directly to government employees to make work-related purchases. P-cards are becoming increasingly pervasive and potentially problematic in Illinois government, and in connection with a recent BGA investigation, Miller offers in an Aug. 2 Daily Herald op-ed best practices for p-card usage:

Keeping Tabs on Taxpayer-Backed ‘P-Cards’

By Emily Miller, BGA Policy & Government Affairs Coordinator

Image/Creative Commons

We all know about credit cards and debit cards. Now, meet the “p-card.”

In recent years, use of the p-card — a procurement card issued directly by government to employees to make work-related purchases — has exploded. Nationwide, p-card spending jumped to $17.7 billion in 2006, compared with only $3 billion in 1996, according to the latest data.

Basically, a p-card acts as a taxpayer-financed debit card. The p-card draws funds for purchases directly from designated bank accounts, which are backed by the tax revenues of a school district, suburb or other public body. Only permissible items can be bought with a p-card.

Although the federal bureaucracy is leading the way in p-card distribution, many local governments in Illinois — including Grayslake Elementary District 46, which the Daily Herald and Better Government Association reported Monday — are now issuing them to employees.

This growing popularity is forcing many government providers to rethink how p-cards are being managed.

According to the General Accountability Office, the independent federal watchdog agency, p-card waste, fraud and abuse often come as a result of inadequate program operating procedures and ineffective program oversight.

Common examples include making personal purchases, using the p-card for unauthorized buys such as alcohol or nonessential goods and services, “gold-plated” expenses, subsequent theft of purchased goods, and use of the p-card for goods or services that should be subject to a bidding process.

Without oversight, the waste of taxpayer dollars is virtually unavoidable. To avoid problems, here are some suggested best practices for governing bodies:

  • Develop a comprehensive written p-card policy. This policy will outline what is and is not allowed and should also indicate who is allowed to hold a p-card. That list of employees should be limited to those who need to make purchases in the course of their daily job.
  • Detail disciplinary action. Each government entity should have a written p-card oversight plan that outlines both oversight and disciplinary actions necessary to rectify any misuse.
  • Limit p-card use. Permissible use of the p-card should be limited only to necessary government expenses under a certain dollar amount, though each public body should develop its own specific lists of permissible expenses based on its public duty.
  • Improve communication. Cardholders should be made aware of the policy through an interactive training program that goes beyond just reading and signing the p-card policy.
  • Finally, a mandatory and documented review by a supervisor or approving official, someone other than the cardholder, should occur for all purchases. Using a checklist, the supervisor or reviewing official should:
    • Review an itemized invoice showing everything that was purchased and what was paid for each item.
    • Ensure the purchase serves a legitimate government need specifically permitted in the p-card policy, not a personal or impermissible one.
    • Ensure a transaction has not been split into segments to avoid maximum purchase amounts, or to get around the competitive bidding process.
    • Monitor the items purchased to ensure no excessive or “gold plated” expenses were incurred.
    • Verify that the items ordered were actually received by the public body.
    • Promptly report and attempt to reconcile all financial discrepancies within a set timetable, and help to enforce disciplinary action where appropriate.

Without strong financial internal controls dictating both appropriate use and required oversight of the program, there is nothing to deter erroneous use of p-cards, or to promptly detect and eliminate misuse and abuse.

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Filed under Fiscal Reform, Procurement

Country Club Hills should tee up some reforms

Credit card expenses and government salaries in south suburban Country Club Hills seem to be—and we’re putting it mildly—out of control.

This isn’t some oil-rich Middle East monarchy we’re talking about. Country Club Hills is a nice middle-class town where municipal debt is around $50 million and family income is typically below $60,000 a year.

It’s not the kind of place where the mayor and city manager—in addition to receiving six-figure salaries, and other perks—should be dropping $80,000 on food and drinks in a single year, using taxpayer-funded credit cards.

So aside from griping, what should we do about it?

For starters, in the opinion of the Better Government Association, city officials need to talk this out more—in a public, open meeting.

In so doing, the Country Club Hills mayor and aldermen (who recently forced more than a dozen job cuts, against the mayor’s wishes) should consider:

  • Eliminating all municipal credit cards and changing to a reimbursement system. In other words, you want to buy something? You pay for it, then get it reimbursed if it’s a legitimate expense. That’s how much of the business community operates. (The City Council recently voted to yank away some credit cards, but left the mayor with his.)
  • Stripping away all expense accounts for city officials. From what we can tell, the accounts that exist now are loosely monitored, and some expenditures don’t seem to have much if any value to the community. A clothing allowance? Please.
  • Instituting some controls on spending. Should taxpayers really be paying for booze on lake cruises, and chicken at Hooters?
  • Revisiting mayoral and aldermanic salaries and perks, which, by almost anyone’s standards, are overly generous.

Country Club Hills just went through a tough election in April, when the balance of power started shifting away from the mayor to the City Council, so we recognize that our proposed reforms could be politicized. But as a non-partisan civic group, that’s not our intent.

Even so, we’re hearing about other potential problems in this city of about 16,000, so we plan to keep our eyes on the community, and offer other suggestions as needed.

The bottom-line is this: residents, not politicians, should come first.

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Will Illinois State Lawmakers Accept Brunt of Pension Reform?

Minority Leader Tom Cross with Speaker Madigan

One of the public pension reforms being proposed in Springfield this week will have its biggest economic impact on lawmakers.

As the BGA Think Tank reported last week in “Who can Fix State’s Public Pension Crisis? Try H.G. Wells”, lawmakers, led in the Republican House by Minority Leader Tom Cross, are considering a plan requiring all current public employees to choose one of three options in regard to future retirement benefits. Employees can choose to enroll in the pension plan available to new employees, which offers a lower state contribution; they can enter a 401(k) plan; or they can keep their current benefits and contribute a significantly larger percentage of their pay to the pension fund.

It’s that final option that has had lawmakers and staff scrambling to crunch numbers in Springfield to determine just how much more employees would have to contribute.

Originally, the pension reform bill called for an increase in all employees’ contributions to 20 percent—an idea that failed to garner enough support to get either Democrats or Republicans to vote for it. So lawmakers and staff have been crunching numbers to determine how much of an increase in employee contributions to pensions would actually be required for each group of employees to make the pension system financially sound.

In our recent “Sticker Shock” investigation into Illinois public pensions, the BGA reported that many of the state’s best-known politicians are receiving in large annual pensions and that more than 10 percent have already been paid more than $1 million since retiring.

Now, according to the Capitol Fax Blog, the numbers have been released, and the actual increase in the percentage of pre-tax income that goes to pensions is largest for state legislators. According to the Blog, the General Assembly Retirement System employee contribution would increase from 11.5 percent to 24.89 percent.

Other public employees would see increases in their contributions, but none as significant as those aimed at lawmakers.

The proposal is far from a slam-dunk. Unions, who oppose the plan, point to the Illinois Constitution, which states that pension benefits for current members cannot be diminished. They are working hard under the dome and on the airwaves to fight against changing benefits for its members.

Even if a bill changing pensions for current employees passes and is signed by the governor, the American Federation of State, County, and Municipal Employees, which represents 75,000 public employees in Illinois, will likely file a lawsuit challenging its constitutionality.

While the proposal itself may not pass the legal and political muster it needs to succeed, amidst all the talk about budget slashing and shared sacrifice, it is refreshing to see lawmakers take a look at ways they can help share and alleviate the fiscal burden of our state.


Filed under Pension Reform

Chicago Tribune Editorial: ‘Does Citizen Daley deserve a security detail?’

By Andy Shaw, BGA President & CEO

The following editorial by BGA President & CEO Andy Shaw appeared in the May 13 Chicago Tribune—read it here.

Mayor Richard Daley’s request for a security detail after he leaves office creates a golden opportunity for Mayor-elect Rahm Emanuel to demonstrate his approach to solving a problem that has fiscal, civic and public safety components.

Throw in the political and human dimensions for good measure and what you have is a microcosm of virtually every daunting challenge Emanuel will face in the coming months.

The security issue goes beyond Daley. Other recipients include the incoming mayor, the city clerk and treasurer; Ald. Ed Burke, chairman of the Finance Committee; and anyone else on an “as needed” basis.

Questions that have to be answered include: Continue reading

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Filed under Andy Shaw, Commentary

Vox Populi: Regular Folks Respond To BGA Chicago Mayoral Questionnaire

No more parking meter deals without representation! Or at least a financial audit!

That’s a rallying cry the next mayor of Chicago should heed before attempting to spin off any major public assets, such as Midway Airport or the city’s water system, to private investors, according to members of the general public who responded to the 2011 BGA Chicago Mayoral Questionnaire.

In addition, responses to the questionnaire indicate the public craves a tighter, leaner and more accountable city government. But a slim majority doesn’t want to reduce costs by chopping away at the medical and retirement benefits of current city workers.

A total of 32 people responded to the BGA questionnaire. Their reactions come after all six mayoral hopefuls participated in the questionnaire and their answers were posted Jan. 26 on the BGA website. At that time, the BGA invited the general public to take the questionnaire and have their responses posted online.

Admittedly, this is not a scientific poll but rather a means of gauging the candidates’ views and comparing them to a sampling of a broader public response. Here are some highlights:

Selling city assets

A solid 100 percent of the general audience said public hearings and greater financial accountability should be required before any public assets are spun off to private buyers. That answer coincides with all the mayoral hopefuls, who agreed that such basic measures are necessary before the city enters any new privatization deals such as the controversial parking meter deal.

Free Forum: Feb. 9 @ 8 p.m.

The BGA will explore privatization at the Feb. 9 forum, “Privatizing Chicago: The New Chicago Way?” at Columbia College, 618 S. Michigan Ave. at 8 P.M.
>> CLICK HERE for details.

Expanding the Inspector General’s reach

Of those responding to the questionnaire, 94 percent say the Inspector General should have the right to go beyond city agencies and investigate the legislative branch of city government. All six mayoral candidates said they favor this proposal.

Reducing the size of the City Council

Of those responding to the questionnaire, 75 percent want to cut the size of the City Council. Of the six mayoral candidates, Gery Chico and William Walls III said “yes”; Miguel del Valle, Carol Moseley Braun and Patricia Van Pelt-Watkins said “no”; and Rahm Emanuel did not respond within the questionnaire’s parameters.

Reducing the salary of mayor and aldermen

Of those responding to the questionnaire, 91 percent said go for it. Of the six mayoral candidates, Emanuel, del Valle, Chico and Walls agreed to consider it; Moseley Braun and Van Pelt-Watkins said “no” to that possibility.

Merging, streamlining or eliminating departments

Of those responding to the questionnaire, 94 percent said there are places to cut. All the candidates agreed.

Cutting medical, pension benefits for city workers

Of those responding to the questionnaire, nearly 55 percent said “no.” Five of the candidates also said “no” to such cutbacks and Emanuel did not respond within the questionnaire’s parameters.

Police and public safety

Of those responding to the questionnaire, 78 percent said they favor realigning police beats to improve public safety and cut costs. Del Valle, Moseley Braun, Van Pelt-Watkins and Walls said “yes”; Emanuel and Chico said “no.”

Meanwhile, 65 percent said the next Chicago police chief should come from the ranks of the city’s police department. Four of the candidates—del Valle, Moseley Braun, Chico and Walls agreed and said “yes.” Van Pelt-Watkins said “no” and Emanuel did not respond within the questionnaire’s parameters.

Personal Finances

Finally, the candidates’ personal finances are of interest to a large majority of those responding to the questionnaire; 87 percent think a mayoral aspirant should reveal his or her tax returns before the Feb. 22 election. Five of the six candidates agreed while Walls said “no.”

This blog entry was reported and written by Robert Reed, the BGA’s director of programming. Contact us with tips, suggestions and complaints at (312) 821-9030, or email our investigative team at rherguth@bettergov.org.

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Filed under 2011 Chicago Elections, Streamlining Government, Transparency

BGA Urges Reform in Wake of Oak Brook Village Investigations

Jan. 11, 2011: "Oak Brook Village Pres., Wife Collect $142K from 4 Pensions"

The tribulations of Oak Brook Village President John Craig, which were revealed in a recent BGA investigation that dealt with his secondary role as liquor commissioner, demonstrate that the Chicago suburb is a candidate for major reform especially when it comes to determining how much power its top municipal leader should wield.

Jan. 24, 2011: "Check, Please?" More conflicts-of-interest questions around Craig

A weeks-long BGA investigation (which in an earlier report focused on multiple public pensions held by Craig and his wife) has prompted a series of recommendations that village leaders are strongly encouraged to follow. The adoption and adherence of these simple but powerful reforms will clarify the role of the village president and serve to make Oak Brook’s more open and responsive to its residents.

The BGA asks that Oak Brook village officials:

  • Institute rules that ban elected officials and those pursuing elected office in Oak Brook from accepting or soliciting campaign contributions from businesses and individuals regulated by village government, including bars and restaurants.
  • Immediately initiate an independent inquiry that explores how a $10,000 campaign donation from Gibsons Bar & Steakhouse to Village President John Craig originated and whether Craig has ever solicited or accepted free food or drink from restaurants and bars in Oak Brook.
  • Separate liquor license duties from the village president’s job. Replace the post with a panel of appointees, or transfer responsibilities to an existing committee.
  • Immediately initiate an independent inquiry that explores whether village code is being violated due to the exclusion of the village clerk from the liquor license process.
  • Immediately initiate an independent inquiry that explores whether elected or appointed village officials steered or tried to steer municipal contracts to friends or political supporters. As part of this inquiry, all department heads should be interviewed.
  • Adhere to the protocols of the manager/village president system of government that calls for the president to help set policy but empowers the village manager to oversee operations. The village president should not be directing heads of departments—including and especially the police chief—on a regular basis, and getting involved in day-to-day decision-making.
  • Consider adopting a resolution that encourages village employees to speak out without fear of reprisal when they encounter suspected corruption, waste or inefficiency in Oak Brook’s municipal government.
  • Institute a procedure that allows elected officials other than the village president to place items on the village board agenda.


Filed under Transparency

Statewide Update—Jan. 24, 2011

  • Southtown Star—Worker’s compensation reform could delay borrowing, “Senate President John Cullerton (D-Chicago) would consider it a “positive side benefit” if progress on worker’s comp makes Republicans more willing to consider borrowing money to pay bills, said spokesman John Patterson.”
  • Chicago Tribune—Plan would charge state retirees more for health care, “The new push is a crackdown on the rising cost of health care for retired state workers. The program costs the state nearly $500 million a year, and more than 90 percent of the retirees and survivors pay no premiums.”
  • State Journal-Register—Top aide leaving attorney general’s office, “Besides being deputy chief of staff for Madigan, Smith has served as the attorney general’s public access counselor for a year, since changes to the state Freedom of Information Act took effect that were aimed at increasing government transparency.”
  • Chicago Tribune—Editorial: Curb free rides, “Free rides, of course, aren’t free. The Regional Transportation Authority estimates they cost the transit system $38.5 million in 2009.”
  • State Journal-Register—Opinion: There’s a reason recall process is convoluted, “…it could be used to oust someone just because they made an unpopular decision. Trying to avoid that is one reason the recall process now part of the state constitution is as convoluted as it is.”

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