Dead elephant, shooting club, global satellite phones, double dipped reimbursements, and $26 million in hidden payments to vendors and school employees… the College of DuPage (COD) is caught faking transparency to pass the goodies.
It was rough going at the second largest college in Illinois this summer. In July, a $20 million state construction grant was stopped after COD President Dr. Robert Breuder’s email was exposed which outlined a political strategy to bring support to the governor. Newspaper editorials called it a “seedy little money grab” and the governor said the behavior was “extremely alarming.”
Activists exposed much more. Since 2009, the college spent $550 million on construction projects with funds reallocated to build an upscale French restaurant and a wine cellar. The restaurant lost over $500,000 in its first year of operation while purchasing over $200,000 in wine and accessories. The President’s compensation is $500,000 annually and nine executives cost taxpayers and students approximately $2.4 million per year.
Last month, I wrote about this college at Forbes, “The Real Financial Crisis in College.” But, the story continues…
Responding to our Freedom of Information Act request for COD checkbook, the college produced a troubling record of payments. $27,931 for dues and fees flowed to the president’s private shooting club. Three global satellite phones were paid for each of the last three years so the president could “keep in touch” during his exotic hunting vacations (he shot an African elephant).
COD President Robert Breuder billed taxpayers and students
for three global satellite phones for his exotic hunting trips (2012-14).
After each exposure, the Board of Trustees acted surprised.
Now, we know why- most of the board didn’t have a clue. Since at least April 2013, $26.1 million flowed through a special type of accounting called ‘imprest’ and was hidden from public scrutiny. At COD, imprest payments aren’t individually disclosed, but instead aggregated and summarized as a line item. Conversely, “operating payments” were individually disclosed in the board packet and posted online.
COD made liberal use of this imprest accounting scheme: $26,100,000 on over 21,000 transactions to 5,613 vendors flowed through 467 separate fund accounts. Recently, COD Treasurer Thomas Glaser told the board during a special budget meeting in June that all financial transactions were listed in the board packet and posted online, but that just wasn’t the case.
The Bureau of the Fiscal Service of the U.S. Department of the Treasury defines imprest funds as “pretty cash funds” and accounting associations warn that weakness in accounting control could result from the use of imprest funds. For instance, only the Board Chairman Erin Birt got to review the line-by-line transactions of these specially tagged payments before the board “approved” the aggregated total amounts.
So what did COD payout via this accounting scheme? Here’s a snapshot:
1. Over $110,000 spent purchasing wine and alcohol described in the register as “instructional supplies.”
2. President Breuder’s private membership dues to the Max McGraw club ($3,800) and three global satellite phones used on Breuder’s exotic hunting trips were not disclosed. Total payments into Max McGraw club were $6,693- including an overnight senior management retreat.
3. COD President and senior managers double dipped their car allowances and collected over $3,600 of in-district mileage reimbursement.
4. Even the accountants and lawyers gleaned non-disclosed payments: Crowe Horwath, $56,029; Robbins, Schwartz $178,652; and Franczek Radelet, $71,780.
5. Legat Architects- the lead architect for the Homeland Security Education Center at COD (which will bear Dr. Robert Breuder’s name after his retirement) was paid-out $164,421.
6. Other connected vendors include COD Foundation Board members- lobbyists and construction companies- received large non-disclosed payments. i.e. Herricane Graphics ($227,157); Roger Marquardt & Co ($85,000); Wight & Company ($31,431); Fuchs & Roselli, Ltd. ($14,698); Power Construction ($5,000); Bison Gear & Engineering ($4,064)
7. Designated ‘petty cash’ funds were hardly used, only $1,774 in payments, while ‘imprest funds’ handled 21,000 transactions.
8. Although President Breuder recently said ‘imprest payments’ were only used on amounts under $15,000, the data shows 106 payments exceeded that threshold and totaled $2.327 million.
9. Over $300,000 paid-out in newspaper and magazine advertising/subscription expense including $140,000 to the Daily Herald Paddock Publications and $139,000 to the Chicago Tribune companies.
U.S. Senator Tom Coburn frequently asks, “Is the spending for the public interest or the special interest?”
Transparency coupled with technology makes it possible for citizens to audit public spending. Starting in September, thanks to COD Vice Chairman Kathy Hamilton’s recent transparency effort, all COD imprest payments will finally be online and subject to scrutiny.
We invite everyone to search the $26.1 million in previously hidden payments on our transparency website at OpenTheBooks.com. Please let us know what you find: click here.
Disclosure: Adam Andrzejewski is the founder of OpenTheBooks.com and IL watchdog organization, For The Good of Illinois