City Colleges misused grant dollars for Ipods

  • By Peter Sachs
  • Staff Writer
  • April 08, 2009 @ 7:00 AM

The City Colleges of Chicago misspent $8,800 in grant funds earmarked for job training programs on things like iPods, a cell phone bill and other ineligible expenses last year, according to an annual audit.

The community college district says it caught the improper charges internally and ultimately fired some of the employees responsible.

The district’s independent auditor, Deloitte and Touche, described the  problem as “a significant deficiency in internal control over financial reporting,” during the budget year ending in June 2008.

The grants in question were disbursed by the Illinois Community College Board and were restricted -- meaning they could only be used for specific purposes. In this case, the money was to be used by City Colleges for workforce development programs that provide job training.

But when the district received the grant money from the state, the auditors said, the money was deposited into an unrestricted account, from which money could be withdrawn for a variety of uses.

Further transfers of the money complicated the situation even more, paving the way for the grant dollars to be misused.

Among the ways in which the money was misspent: on five Apple iPods with leather cases, costing a total of $2,000; on a $128 cell phone bill for an employee not connected with the grants; on $2,500 for ineligible transportation expenses, and for more than $4,000 in salaries for employees who weren’t supposed to be paid from the grant.

“Steps were being taken to correct the matters and to rectify them prior to the external auditors seeing the expenditures, but the external auditors of course reported what they saw in the paperwork,” district spokeswoman Elsa Tullos says.

The two grants had a combined value of $360,000 last year, of which about $190,000 was spent on salaries.

“We’re talking, roughly $8,000, $9,000 the context of $90 million worth of grants managed without incident and maintained in full compliance,” Tullos says.

The audit recommended that each campus more carefully review how it spends grant money – and the district has done that, Tullos says. The colleges now do monthly reviews of how grant money is being spent.

The business managers involved in the improper expenditures were fired for “poor performance” because of the grant situation and other issues, she says.

“Of course, the more checks and balances you have, the better, so we’re certainly pleased with the intensified checks and balances process,” Tullos says.


Daily News Staff Writer Peter Sachs covers higher education. He can be reached at 773.362.5002, ext. 18, or peter [at] chitowndailynews [dot] org.