No accounting for East’s credit cards
By stephanie Lulay email@example.com October 6, 2012 4:54PM
Jerome Roberts, Superintendent of Schools East Aurora School District 131
The charges by school administrators on East Aurora School District credit cards from June 2011 to June 2012 included:
$135 — Caesars Advance Deposit Atlantic City, N.J.
$397 — for an undersink organizer at Garden Ridge
$83 — at a TJ Maxx in Wisconsin
$66 — at a Walmart in Wisconsin
Updated: November 8, 2012 12:04PM
AURORA — On the city’s East Side, the new school year kicked off with East Aurora School Board President Annette Johnson saying she had “lost trust” for some of the district’s administrators.
Now, more details of the School District’s finances have begun to unravel. East Aurora Superintendent Jerome Roberts said that the district does not have “about half” of the receipts that show exactly what administrators purchased on district-provided credit cards at shops like Target, Walmart and online retailer Amazon over the past year.
“To be honest, people weren’t keeping (the receipts) very much,” Roberts said Friday.
Taxpayers are footing the bill for those credit card purchases.
The district’s Old Second Visa Business Card statements show that in a one-year period, East Aurora administrators spent $322,733 on the charge cards. The Beacon-News acquired the bills from June 2011 to June 2012.
After Johnson, an accountant, and fellow board member Richard Leonard, a former contractor, started asking questions, Roberts froze the administrators’ credit cards in August. Credit card bills that topped out at $40,718 in one month were reduced to $900, according to Roberts.
But with no receipts, Roberts is asking the public to take these administrators’ word that the money was spent prudently, more than a year after some of the purchases were made.
So the question arises: In these difficult financial times, was all that credit card spending necessary?
One of the most puzzling of the credit card statement line items came as school let out for the summer in June 2011.
The line item, purchased on a central office administrator’s card, reads: Caesars Advance Deposit Atlantic City, NJ: $135.89.
Caesars in Atlantic City is a casino and hotel. According to records, a flight to Philadelphia, an hour’s drive from Atlantic City, and registration to a Philadelphia education conference were also purchased on the same administrator’s card that month.
Roberts said that district administrator was out sick all of last week and had not been able to provide an explanation. The district’s finance department is not currently in possession of receipts for those charges.
“(The purchase) looks funny, yes,” Roberts said. He said it was the most concerning of the charges made on the district credit cards.
For that conference, the administrator charged a $409 flight on American Airlines from Chicago to Philadelphia. That same month, the same administrator used the district credit card for a plane ticket for another East Aurora employee to fly from Chicago’s Midway airport to Philadelphia, with a layover in Atlanta. That ticket, for an AirTran flight, cost the district $936.
Other purchases over the year include a $1,933 bill at the Bolingbrook Golf Club for a retreat for central office administrators. Administrators spent that time to plan the school year, Roberts said, and the Bolingbrook Golf Club offered a better deal than Aurora clubs.
One administrator made a $397 credit card purchase at Garden Ridge for an under-sink organizer and decorative items. Three central office administrator purchases at Home Depot, which totaled $3,488, were for heavy-duty shelving units.
While Roberts said a few of the purchases may be questionable, for the most part he hasn’t come across anything in the statements the district would have refused to pay. He said all of the administrators using credit cards were coming in under their allotted budgets.
“What it has done, though, is it allowed for sloppiness,” he said.
Board President Johnson also complained about district bills that were paid late every month, saying that was “money thrown out the window.”
Statements show that in 2011, East Aurora paid $1,603 in interest on credit cards bills that were paid late.
That problem has since been fixed. A $650 upgrade made to the district’s billing system has allowed the district to pay the bills more than once a month, she said.
The credit card statements that lack receipts include those for hundreds of purchases made at Walmart, Target and Walgreens stores.
When asked to explain some purchases, one building principal said a $284 charge at a Bed, Bath & Beyond store in Downers Grove in June 2011 was for a wooden office stand, a school calendar, artwork, artificial plants, books, picture frames and storage containers.
An $83 charge at a TJ Maxx in Janesville, Wis., in July was for stationery, the administrator told Roberts. That administrator also made a $66 purchase at a Wisconsin Walmart, according to records.
Another central office administrator, who Roberts said provided all of the receipts for purchases, listed a $350 Target bill for “incentive awards” for teachers.
From June 2011 to June 2012, building principals and central office administrators made 116 purchases at online retailer Amazon, which ranged from $4.15 to $3,164.
At Walmart, 68 purchases were made; at Walgreens, 20 purchases; at Jewel, 18; at Target, 12; and at Dominicks, 11.
In June 2011, $42 and $70 credit card purchases were made at an Aurora Walmart; a $109 purchase was made at a Lockport Walmart; and $93, $94 and a $123 purchases were made at an Oswego Walmart.
Roberts said a lot of the Walmart-type charges were administrators buying snacks for committee meetings.
“Sodexo was charging us $7 for a case of water. You can get that for $3 at Sams,” Roberts said. Sodexo is the district’s food vendor.
Johnson said the School District has since worked out a better deal with Sodexo.
While administrators bought from stores in Aurora, Oswego and Montgomery, they also charged items at the same well-known retail stores in Lemont, Palos Park and Bolingbrook.
Roberts said he shut off the credit cards because he was concerned about the lack of receipts.
Administrators should have been turning their receipts in to the business office after purchases on credit cards were made, he said. Then, the district’s finance director, who up until this month was Jay Augustine, would review the receipts to make sure they matched up with the credit card bills.
But that was not being done, Johnson said.
Following the board’s probe into bills, Augustine notified Roberts on Sept. 21 that he would retire effective immediately. Augustine could not be reached for comment for this story. Twice in the week before his abrupt retirement, the School District told The Beacon-News Augustine would not respond to questions about the district’s credit card use.
Roberts said he and a few other administrators kept meticulous receipts.
“Professionally, nobody came to (me) and said ‘Hey, you need to keep your receipts.’ You just do,” Roberts said.
Under the district’s purchase order system, all purchases must be pre-approved. The district credit card system was meant to be used for emergency purchases and travel only.
“What was happening is people were using their credit cards to go out and buy because it was much more convenient than using a purchase order,” Roberts said.
Roberts said the time to clean up the district’s financial mess is now.
“No more excuses,” he said.
Now, the district will require all purchases to be made through a purchase order unless the purchase cannot be made by that method.
Johnson said the district is also working on putting a Procurement-Card system into place, which according to West Aurora School District spokesman Mike Chapin, many other area school districts use.
A P-Card functions like a credit card, but the P-card system is a cooperative program where some school districts all use the same card through one bank on separate accounts. This allows school districts to get better rebate amounts on big-ticket purchases.
Chapin said the West Aurora district received more than $13,000 in rebates last year from using the P-Card.
“But the real savings to the district is in the efficiencies from processing one purchase order for the month instead of multiple (purchase orders) for each cardholder,” Chapin said.
The P-card also helps avoid late fees, he said.
In addition to West Aurora, the Oswego, Geneva, Batavia, St. Charles, Indian Prairie, Naperville, Sandwich and Somonauk school districts all use the Procurement-Card system, Chapin said.
“Once (East Aurora) gets this P-card system in place, this all gets eliminated,” Roberts said.
Johnson anticipates the School District’s 25-year-old business system software will be replaced by February. Once that happens, the public will be able to see the itemized invoices for what the School District is spending online, she said.
New committee meetings between teachers and administrators will examine spending this year, too, Roberts said.
Johnson, who owns a small business, said she finds some of the spending “unacceptable.”
“But every school district will tell you that this is indigenous to every school district across the country,” she said.