Could it Happen in Lisle? Library Board Cancels Employee Credit Cards

In Lexington KY. 2009...

Library Employees $350,000 in Credit Card Purchases Questioned

Nineteen Lexington Public Library employees who had active library credit cards, other than chief executive Kathleen Imhoff, spent about $350,000 with them over the past three years, according to a Herald-Leader review of library documents.

Earlier this month, the library board voted to cancel most of those credit cards after a Herald-Leader story detailing $134,000 that Imhoff spent in five years on travel, meals, gifts and other items. Imhoff and four others were allowed to keep their cards.

The majority of the 19 employees charged for work-related travel and materials, as the credit cards are intended under library policy. Several employees seldom used their cards.

But thousands of dollars also were spent on beer, wine and liquor; parties and gifts for library board members, staff and their families; "working meals" for Imhoff and other library managers at upscale Lexington restaurants; and donations to the library Imhoff previously worked for in Florida.

Just last week, Imhoff reimbursed $132 after the Herald-Leader asked about a 2007 dinner at Jonathan's at Gratz Park to which she brought her husband. That meal was charged as library business to another employee's card.

Among the employees allowed to keep their cards is Imhoff's executive assistant, AnnaMarie Cornett, who charged $66,109 since 2006. Nearly all of those charges were for Imhoff or other library officials, not for Cornett herself.

The library board still trusts Imhoff, said chairman Burgess Carey, but thinks the library needs to more carefully watch its non-essential purchases.

"We felt like we had too many cards out there, and we wanted to monitor this spending more closely," said Carey, who this month began to review Imhoff's credit card bills.

Most of the library's $15 million annual budget comes from a dedicated portion of Fayette County property taxes.

Red flags have been raised over the credit cards in the past

A library audit in 2007 warned about questionable spending on the cards.

At least one library employee was fired for inappropriate use of a card, although Imhoff declined to give details, citing "confidentiality."

Despite that, Imhoff said she just this month is starting to read her employees' credit card bills as they arrive.

"I will be doing that from now on," Imhoff said. "In the past, the business office did that. I only checked them periodically."

Nothing she has seen so far worries her, she said.

"I want you to know that there was no personal gain in any of these purchases," Imhoff said. "These are people of good judgment."

In a recent alert to nonprofit boards — which the library board said it's reviewing — State Auditor Crit Luallen advised that at least one board member should read all credit card statements before payment. The task should not be left entirely to those within an agency, who use the cards, Luallen said.

"Without proper controls in place, the use of credit cards carries a high risk of fraud," said Luallen spokesman Terry Sebastian.

Money from "Friends"

Of the $349,867 spent by the 19 employees, the library said that $48,266 was reimbursed by groups or individuals, most often by the non-profit Friends of the Lexington Public Library.

Friends runs a used bookstore in the Central Library basement and raises about $250,000 a year to support the library. Among other things, Friends subsidizes after-school educational programs for young people.

To boost employee morale, Friends agreed to let the library use small sums for "staff celebrations," which it imagined as modest affairs, said Friends board chairman Mike Bunch.

Bunch said Friends board members have been concerned to read news stories and hear questions about Imhoff using the non-profit's money at expensive restaurants.

For example, records show that in 2006, Imhoff instructed Cornett, her assistant, to bill a $160 "office lunch" at a la lucie to the Friends account. (The charge originally went on Cornett's card.) Imhoff and eight other employees dined that afternoon on grilled salmon and sliced tenderloin, with $6 slices of cheesecake for dessert.

"Am I concerned about it? Yeah, because it's not what we approved," Bunch said. "We never approved money to be used by the director on her own entertainment or on dining out at places like a la lucie."

At a meeting on Wednesday, the Friends board agreed to ask library officials to appear in the near future and explain in greater detail how its money is spent, Bunch said.

Imhoff said the a la lucie meal was an annual holiday treat for her and others, and as such, it was an appropriate use of Friends money for staff celebrations.

Alcohol purchases

The library's credit card policy describes alcohol as a "disallowed expense," saying that employees are responsible for reimbursing the library for those charges.

However, that rule appears in the travel section of the policy, which Imhoff said suggests alcohol purchases are permitted if they occur in Lexington. Alcohol is not addressed otherwise in the policy.

"They are allowable," Imhoff said.

Spending records show more than $2,700 in combined alcohol purchases on cards assigned to Cornett, marketing manager Greg Davis, and William Watts, executive director of the Lexington Public Library Foundation, which — like Friends — raises outside money for the library.

A small part of that was for individual drinks of beer, wine and liquor consumed when library employees ate at restaurants in Lexington and on trips.

Most came from bulk purchases at places like Liquor Barn, where the library bought liquor for social events. Some events were open to the public, such as a jazz concert for young professionals. Others were for library leaders, including a cocktail party where the library board mingled with the Friends and foundation boards, and a wine reception to honor a departing library board member.

Dining out

Library credit cards paid for scores of meals at local restaurants, such as Bellini's, Jonathan's at Gratz Park and Dudley's; food and drinks at social events for the library board, staff and families; and various gifts, including flowers, cuff links, $100 gift cards, $25 gasoline cards and baseball tickets, for board members, staff and others as chosen by Imhoff.

Last winter, Cornett used her card to charge $2,160 to Annette's on Vine for the library board's 2008 holiday dinner, which the library said 15 people attended.

Carey, the board chairman, said the holiday dinners occur only once a year, and they coincide with the December board meeting, so library business is conducted.

"Office meals" — lunches and dinners at restaurants where library officials discuss their work and make plans — are an efficient use of time, given many employees' long hours and heavy workloads, Imhoff said. People can't always stop working when mealtime comes around, she said.

"There's absolutely nothing wrong with that if we're doing the business of the library, and in my opinion or their manager's opinion, they can finish up something that probably is time-sensitive," Imhoff said.

Watts, of the library foundation, said he takes potential donors to nice restaurants to discuss what they might do for the library. Unlike the other library credit cards, which are paid off by the library's general fund, his card is paid off by foundation funding for the library, Watts said.

Last year, the foundation gave about $105,000 to the library, he said. Watts has charged $45,090 on his card since 2006.

"When you need to raise money from rich people, you have to wine and dine them," Watts said. "It takes money to make money."

'Recognizing achievement'

Imhoff sometimes directed that gifts be sent to people outside the library.

When a local architecture firm the library uses won an award, she told Cornett to charge a $96 gift for the firm from Edible Arrangements. She told Watts to charge $410 in gift certificates and donate them to a silent auction held by her former employer, the Broward County, Fla., library.

It's appropriate to use library money to maintain professional relationships, Imhoff said.

"The library is not ashamed of recognizing the achievements of its colleagues," Imhoff said.

In 2007, Imhoff flew a friend and former colleague from the Broward County library, Dorothy Klein, to Lexington to discuss library fund-raising techniques. She told Cornett and Watts to charge more than $1,300 for the trip on their cards, including Klein's stay at the Gratz Park Inn, both Watts and Imhoff said.

Everything that Klein related during her visit could have been shared by telephone, Watts said last week.

"In my opinion, I did not need Dorothy Klein to be here," Watts said. "I did not authorize any of that. I was told by Kathleen, 'This is what we're going to do.'"

Imhoff called it "a justifiable expense."

"She was not invited here as my friend and colleague," Imhoff said. "She was invited here for her expertise as a foundation director. She is nationally recognized for the success they have had at that library in which they've raised over $250,000 with a single event."

Reforms coming

Without their library credit cards, most employees will pay out of their own pockets for small expenses and apply for reimbursement, and use purchase orders for costlier items, said Ruthie Maslin, the library's outreach services manager.

Maslin charged $34,802 on her card over three years. Among her final charges before the library board canceled most cards was $1,004 for a trip in March to the Paris Las Vegas Hotel and Casino. Maslin, whose job involves providing library services to the elderly, said she was attending a conference on aging, which was educational.

"I know that it sounds weird to hold it at a casino, but that's just where they held it," Maslin said.

Library board members said they understand that the public is concerned about library money going to travel, meals and gifts, as opposed to books and programs. 

The board is setting new spending limits, and some expenses that seemed defensible before will get a second look, said Carey, the board chairman.

"We're certainly monitoring it now," Carey said. "We've just amended library policies to be sure that every future expense will be more tightly monitored."