Poplar Grove’s Audit of Credit Card Expenditures –

Poplar Grove, Ill. (ECWd) –

The Village of Poplar Grove, Illinois, received the preliminary audit report from a forensic audit conducted on credit card expenditures between 2019 and 2022 2023 – Owen Costanza was the village president edited to add: (until 2021 – the village policies were allegedly amended during Costanza’s term of office) and Don Sattler started as village president after Costanza lost the election in 2021.

The findings included numerous purchases for take-out meals for employees that were not pre-approved by the board as required. Generally, the village’s purchase, travel, and procurement policies did not or do not comply with state statutes, and the soliciting of donations from village vendors violates state law (Gift Ban Act).

Although not specifically mentioned in the report, alcohol was purchased for personal consumption at restaurants using the village credit cards (see page 73) which included martinis, vodka, mixed drinks, and wine – none of which was an authorized purchase.

Additionally, a $1.131 million contract was approved without bidding and without the required two-thirds vote of the village board (see page 92).

Some of the specific findings include:

Generally:

• There is minimum accountability for the use of the card
• While receipts support many of the charges shown on the monthly statement, there is no accountability or approval for using the card
• In many cases, we could not determine the individual using the card and the associated business purpose
• Although the Village is exempt from sales tax, we found that sales tax was generally paid when the Master Card was used in-person
• The Home Depot Card charges were not approved, but sales tax was not charged

Travel purposes:

• The current processes do not conform to State Statutes and the Village ordinances concerning travel.
• The Village Ordinance for Travel is inconsistent with the State Statute. The Ordinance, as written, only pertains to Village Trustees, although it is required to include Village employees.
• The Village Employee Handbook concerning travel is inconsistent with the State Statute covering travel and the Village Ordinance addressing Trustee travel.
• Expenses paid directly by the Village through the Village Master Card are not submitted on an expense report with employee-incurred expenses to obtain Village Board approval and document the actual costs incurred for any one trip.
• Expenses exceeding allowed limits or preapproved ceilings are not reviewed by the Village Board and approved by a roll call vote as required by State Statute and Village Ordinance.
• The Village Credit Card is used to purchase in-person and carry-out meals for staff and others. There is no accountability for these purchases.
• Travel, meals, lodging, and other related expenses are subject to Freedom of Information Act (FOIA) requests by State Statute. The current practices make it virtually impossible to comply with a FOIA request as we did not see an accounting for any official travel, meal, seminar attendance, or other related event.
• The Village President is provided a Stipend for official travel and related expenses. The Stipend is treated as salary. This practice appears to conflict with the State Statute governing travel.

Procurement purposes:

• The credit card is used for subscription payments (Adobe, Microsoft, etc.) and purchases for meals, flowers, and small tools/supplies.
• In many instances, there were receipts but no pre-approvals. As noted earlier, the Village does not have a policy governing the use of the Cards.
• Many charges included payment of sales tax.
• In addition to reviewing purchases made with the Credit Card, we selected three large purchases to determine compliance with the Village Ordinance and State Law. One was a major contract renewal, one was an emergency purchase, and one was a large equipment purchase. All three purchases had compliance issues, which are discussed below.

Soliciting Donations from contractors:

• We review the Village’s practice of soliciting donations from Village vendors. We discussed this practice with the Village Attorney who informed us that it violates Article VIII of the Illinois Constitution.

Audit report below: