Inspector: Chicago finance department lacks tools to collect $8.1 billion owed

By Jim Talamonti | The Center Square
The Center Square

(The Center Square) – Chicago’s inspector general says the city is owed at least $8.1 billion and lacks the tools to collect the money.

A new report from Chicago Inspector General Deborah Witzburg said the city’s finance department is responsible for managing the debt but is not well-equipped to manage it.

“Department of Finance lacks the tools necessary for comprehensive management of the city’s debt,” Witzburg told The Center Square.

Witzburg said there is no entity in city government that has a clear and comprehensive view of the debt.

“What we know is that we find at least $8.1 billion in outstanding debt owed to the city and that is a floor. That’s what we from an oversight perspective can account for, and what we know from the kind of gaps in tools that are available is that it is at least that much,” Witzburg said.

The report found that the city’s debt checks are not comprehensive, and Witzburg said Chicago lacks agreements with sister agencies to collect money from city employees.

“We know where to find them well enough to send them a paycheck. We we ought to be able to collect outstanding debt,” Witzburg said.

The report showed that Chicago Public Schools employees had the most outstanding debt of any city agency, with 5,413 workers owing $4.1 million. The Chicago Transit Authority was next with $3.2 million owed by 2,678 employees.

The report says public employees tend to owe the city money for things like sverdue charges for city services, unpaid fines for municipal code violations, and expenses related to emergency medical services provided by

the city.

Parking tickets, moving violations and unpaid water bills are also part of the uncollected debt.

Witzburg said there are equity considerations in debt collection efforts, but the city can’t manage what it can’t measure.

“If we cannot even get a good handle on how much debt is owed and where it comes from, we certainly can’t make good and thoughtful and strategic decisions about how to go about solving that problem,” Witzburg said.

In response, the Chicago Department of Finance promised to, among other things, work with city departments to ensure complete reporting of outstanding debt, work to negotiate intergovernmental agreements with sister agencies to require debt checks when onboarding new employees, explore technical improvements that would allow debt checks of city contractors before payment, and contact the Office of the City Clerk to assist in developing a process to refer indebtedness of elected officials.