Inspector general slams CPS gift card use in annual report

SHARE Inspector general slams CPS gift card use in annual report

Chicago Public Schools Inspector General Nicholas Schuler. | Sun-Times files

The independent agency that investigates Chicago Public Schools has criticized the district’s “widespread” use of gift cards, saying the system is “wasteful” and has led to a number of thefts, according to the watchdog’s annual report.

One investigation found that five CPS employees had spent a total of about $5,500 using school-purchased gift cards for services that included: car detailing at a local BMW dealership; dinner at a downtown steakhouse; and layaway payments at Kmart.

Between January 2013 and December 2016, CPS schools, network offices and central office departments spent about $250,000 to buy 7,462 gift cards, according to the report. The cards were often bought as incentives for good student performance or attendance.

The report describes the purchase of the cards as wasteful, noting that they come at a high cost.

“Vendors that sell gift cards to CPS are essentially selling cash but they charge significant processing and service fees on top of the value of the gift cards,” the report states. “Those fees have been, on average, 18 percent markups on the gift cards purchased since January 1, 2013.”

The report also details the widespread practice of using the gift cards to “circumvent the district’s prohibition on the use of petty cash.”

CPS Inspector General Nicholas Schuler said uses of the gift cards ranged from “good intentioned” to “out-and-out theft.”

In an emailed statement, CPS spokesman Michael Passman said, officials “appreciate” the inspector general’s office for “identifying employees who have not upheld the values of our district, particularly when their actions deprive students.”

“During the past year, CPS has worked to address the incidents outlined in the report, and we are reviewing the Inspector General’s recommendations to determine whether they will strengthen district operations and prevent misconduct,” Passman said.

In all, the OIG received 1,457 complaints last year about the nation’s third-largest school district. About 19 percent of the complaints — the single largest category — concerned mismanagement; another 11 percent were related to residency issues; and about 10 percent concerned “discourteous treatment,” according to the OIG.

About a quarter of the complaints were submitted anonymously, the watchdog agency reported. The office opened investigations in about 19 percent of the total complaints.

In the case of the gift cards, the watchdog agency has recommended, among other things, that the Chicago Board of Education create a policy that specifically spells out when schools may use gift cards, as well as a way to track gift card usage for auditing purposes.

In the case of the five employees who together spent about $5,500 with gift cards, they were all either fired or resigned, according to the report.

Elsewhere in the report, an elementary school principal allegedly stole at least $22,000 in school funds during a four-year period to pay for personal items that included “very large amounts of liquor, beer and wine” and “large quantities” of food, such as “steaks, salmon fillets and rib roasts.” The case was referred to Cook County prosecutors.

In other investigations, the OIG found several “high-level” central office employees violated district policy by living outside of the city.

“The violations by high-level central office employees are particularly concerning given that CPS regularly terminates the employment of low-level employees for such violations,” the report states.

And, it also “raises questions about who else knew and how could a high-level central office official live in the suburbs without other high-level administrators knowing,” Schuler said.

The report details several instances where employees allegedly abused the sick time policy, instead taking vacations in Europe, Mexico and elsewhere.

The OIG had a budget last year of about $2 million, with 18 full-time employees.

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