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EAG Examines Madison District Credit Card Charges

Comments | Posted in News | By MacIver Institute | Posted September 11, 2012 4:11 PM

The following appeared in the current edition of the Wisconsin School Reformer newsletter.

Employees ran up big hotel, restaurant bills on Madison school credit cards in 2011

Loose accountability standards leave district unable to explain many charges


By Steve Gunn and Ashleigh Costello
EAGnews.org 
  
MADISON - We have a question for the taxpayers of Madison: Do you have any idea how your education tax dollars are spent?  

If the answer is no, well, you are not alone. It turns out that Madison school officials have very little idea, either, particularly when it comes to expenditures involving district credit cards and checks. The district issues multiple credit cards for various departments in each of its 55 schools and other buildings, according to Candie Steffen, manager of the district's accounting office. Each building has a site manager who is supposed to keep track of all purchases and receipts for seven years.

But no records are forwarded to any central office in the district. Some purchases may be inspected periodically by auditors, but there is very little oversight regarding who uses credit cards to pay for what.

An EAGnews.org investigation determined that district credit cards were used for at least $44,723 worth of hotel bills and $10,036 worth of restaurant bills in 2011. These purchases came at a time when the district was making painful budget cuts, including teacher layoffs.

Even worse, Steffen made it clear it's difficult for officials to keep a close eye on credit card purchases.

"Our policy is that (receipts) are to be retained at the card holder's level," Steffen said. "So if it's a school card holder, that is usually retained in the office. If it's a district person, it might be in my building here. So no, they do not all get forwarded."

Traveling in style

There were a lot of questionable credit card purchases in 2011, according to our review. The following is just a sampling of the more expensive charges:

  • We're sure a great time was had by all at the Scottsdale Plaza Resort, where a school district credit card was used to ring up $2,674.35 in charges on July 1, 2011.
  • Another charge, at Hyatt Hotels - Chicago on July 13, 2011, totaled $9,435.50. A similar charge, at the same hotel on the same day, totaled $6,038.72.
  • An establishment named the Sheraton NY Hotel and Towers also made out well on Madison taxpayer money. Five credit card transactions of $626.71, all dated Jan. 6, 2011, totaled $3,133.55.
  • A few months later, on April 15, Nuestro Mundo Community Schools ran up a credit card tab of $5,031 at an Embassy Suites.
  • There were two charges in December at the "Hotel 71 - Downtown Chicago" - one for $2,200 on Dec. 5 and one for $2,536 on Dec. 19. 
  • Two transactions - each worth $288.96 - were made at the Rio Suites in Las Vegas on April 27, 2011. On June 23 there were three separate transactions at the Heidel House Resort and Spa, totaling $223.57. There was another charge at the same resort on June 29 for $756.64.
  • There were also charges at Hilton Hotels in New Orleans ($455.74), The Brown Hotel in Louisville, Kentucky ($1,138.62), and the Renaissance Hotels in St. Louis ($505.26).


Not all of these charges were made with school funds. District staffers were allowed to run up a significant tab with grant money from the federal "Individuals with Disabilities Education Act" (part of President Obama's stimulus package).

The IDEA grant money was used for credit card charges at the Caribe Royal Resort ($855), the Kahler Grand Hotel ($4,232.38), the Stoney Creek Inn ($1,190), the Little America Hotel ($4,107.60), and the Kalahari Resorts in Wisconsin Dells ($928.76). That totals out to $11,313.14.

IDEA grant money was also spent at upscale restaurants.On July 13, there was a credit card charge totaling $261.62 for Dali's Restaurant, a Spanish tapas bar. Then on July 14 and 16 there were three credit card charges to Legal Sea Foods totaling $520.42.

Some of the more mysterious charges were less costly. They included purchases of stained glass from a place called The Vinery ($727.86), some type of purchase from a shop called Candina's Chocolatier ($312), and various orders from Starbucks ($149.66). The district' checking account register also turned up a few interesting items. They include a May 25 check to the Holistic Life Foundation for $4,000 and two checks (Sept. 1 and 15) to the Holy Wisdom Monastary for $2,993.20 and $1,900, respectively.

Is this kind of spending necessary?

We asked Ms. Steffen about a number of these expenditures. She had a vague knowledge of some and no information about others. She could not provide receipts for any of the credit card purchases, and indicated that it would be a difficult process to contact personnel in various buildings to chase them down.

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"I don't know myself what every single item on a procurement card bill is," Steffen said. "I mean there is a thousand lines every two weeks. And I certainly don't know what every single one represents. 

"I occasionally question people on them or things like that. It's the budget manager's responsibility, the card holder's, to be sure those cards are used appropriately and have the documentation for what that is."

None of this is Steffen's fault. It's the fault of a district policy that does not force cardholders or site managers in individual buildings to forward receipts to a central office.

We're not suggesting any of these purchases were illegal, or even in violation of district policies. But it seems to us that a school district that hands out so many credit cards, with minimal oversight over purchases, is just begging for abuse and fraud.

And even if every charge was on the level, were they all necessary, particularly in a year when the school district was slashing its budget and laying off employees?

Perhaps travel is important for professional staff, but do they have to stay at expensive Hiltons or Renaissance hotels? Wouldn't a nice, clean Super 8 or Red Roof have sufficed just as well, with the savings going back to the school to help balance the budget?

There's room in the budget for socialist propaganda

We saved this space for one transaction on the check register that really caught our eye. It wasn't the most expensive, but it might have been one of the most outrageous. 

District checks were used to make five payments totaling $812.07 in 2011 to Rethinking Schools, an extreme left-wing political publication that encourages teachers to bring their liberal political views into the classroom and present them to students as fact.

The district has spent a total of $1,048.76 for various editions of Rethinking Schools since 2008.
In its current issue, Rethinking Schools features an article about a high school science teacher who expanded her curriculum to teach students about the impact of cancer and the "political realities of who gets sick and who gets treated." This is clearly an advertisement for Obamacare.

Even more bizarre, the current issue contains an editorial describing all education reform advocates as misogynists (woman haters) because the majority of teachers are women. Go figure.

It's probably no coincidence that Bob Peterson, president of the Milwaukee Teachers Education Association and a noted socialist, is a founder and contributor to Rethinking Schools. 

If Madison officials are going to spend money on periodicals pertaining to education, shouldn't they avoid publications that offer nothing more than political propaganda? We certainly think so.

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