Kane officials look to rein in government ‘p-cards’ after county $60K spent on DeVry tuition

GENEVA – The Kane County Executive Committee on Wednesday voted to approve changes to its financial procedures for using its government credit cards – known as procurement or p-cards – to have more oversight and control of their use.

The revised policy will go before the full County Board at its Jan. 11 meeting on the consent agenda.

The county issues the cards to elected offices and departments to use for purchases without having to go through a purchase order procedure. The policy update comes after an audit showed that Information Technology Director Roger Fahnestock put more than $50,000 on his county credit card to pay for one of his employee’s college tuition at DeVry University.

The Finance and Budget Committee first reviewed the policy changes last year before passing them on to the Executive Committee.

Finance and Budget Chairman Dale Berman, D-North Aurora, said the amended policy “just spells things out a little more clearly.”

“What it really did was bring everything up to date from the standpoint of who can use it and who has authority to approve it,” Berman said. “I think there were some discrepancies and some differences that were all brought to light and were changed. … What it did was make things more accountable with internal controls.”

As to not mentioning tuition payments made on a county credit card from 2017 to 2020, Berman said those charges were made before his time on the board.

“This was not to satisfy something done in the past,” Berman said of the changes the committees approved. “No one was trying to hide anything. Something happened in the past, and we want to make sure we have more control over it in the future.”

Changes include the number of cards and their transaction limits are to be reviewed annually and approved by the standing committee to which the department reports and the Finance Committee.

According to the revised policy, the office or department with p-cards has to appoint a procurement card administrator, who cannot be the same person as the department head or elected official.

The current policy only requires that a department director verify the charges made to a county credit card. In other words, the same person making the charges verifies them.

The Purchasing Director is to review p-card statements “at least weekly, follow up on any suspicious activity with the cardholder and/or the procurement card merchant and notify the Auditor’s Office if any fraudulent activity was detected,” the policy states.

The number of procurement cards and transaction limits for each cardholder will be reviewed annually by the standing committee and the Finance Committee, and can only be used for “allowable Kane County purchases,” according to the agenda.

The revised policy restates the previous language that the cards cannot be used for “cash advances, personal charges, alcoholic beverages and tobacco products,” charges which also were forbidden in the existing policy.

As in the current policy, those who use the p-cards sign an agreement as to how they will be used, with the understanding that the county does not have to provide credit cards to anyone.

Other new language includes educational assistance to be provided outside of the county’s tuition reimbursement policy.

The assistance should meet “the criteria of a working condition benefit as determined by the IRS,” which means that the education is required for an employee to keep his or her present salary, status or job, and serves as a bona fide business purpose of the county, the policy states.

If the educational assistance does not meet the IRS criteria of a working condition benefit, or is more than the non-taxable annual limit, it “must be reported to the Payroll Department so as to allow the appropriate payroll taxes to be processed,” the policy states.

Wednesday’s agenda was incorrect in listing proposed changes to the tuition reimbursement policy, as it had not been passed on by the Human Services Committee, so it was removed.

During public comment on Wednesday, Batavia resident Bob McQuillan again criticized Kane County officials regarding the handling of nearly $60,000 spent on one employee’s private school education.

“The board chairman at the time the payments were made (Chris Lauzen) is quoted as saying ‘No, I did not know the specific amount of these 17 disbursements made over a 4-5 year period, approved by the Board by overwhelming majorities,’” McQuillan said, referring to a Kane County Chronicle article.

“If he didn’t know, why should other Board members have known?” McQuillan said.

Board members do not vote on individual p-card transactions, they approve payment to Fifth/Third Bank, McQuillan said.

“It is time for Board members to stand up and publicly demand the truth. That is unless you think spending $60,000 of taxpayer’s money isn’t all that important. I can only point out, on behalf of the taxpayers, why this spending is inappropriate,” McQuillan said. “You must decide what should be done about it.”