The City of Chicago Office of Inspector General announced on Apr. 16 that the Department of Finance does not have the necessary management tools or policies to address at least $8.1 billion in outstanding debt owed to the city.
The findings are significant because they reveal gaps in how the city tracks and collects money owed for services, fines, and fees. This lack of oversight could affect the city’s financial stability and disproportionately impact residents in economically vulnerable communities where debts are concentrated.
According to the audit, debts stem from overdue charges for city services, unpaid fines for municipal code violations, emergency medical services provided by the city, as well as additional interest and collection costs. The Department of Finance is responsible for overseeing all revenues owed but currently lacks comprehensive policies or goals related to debt management. No single department is aware of or manages all outstanding debt across city agencies, making it difficult even to determine an exact total amount owed.
“The City is in dire financial straits. We simply cannot operate without a clear view of this mountain of uncollected debt which is at least $8.1 billion high,” said Deborah Witzburg, Inspector General for the City of Chicago. She added that some debts date back to the 1990s: “Comprehensive management, an accurate accounting of collectible City debt, and an equitable plan for appropriate collections could dramatically improve the City’s fragile financial footing,” Witzburg said.
The Office of Inspector General recommends that the Department of Finance create formal policies and procedures such as a standardized debt management plan, improved definitions for cross-department coordination, better supervision over collection agency contractors, and technical solutions to track debts more effectively.
In response to these recommendations, the Department said it will work with other departments on complete reporting; explore writing off uncollectible debts; ensure adherence to official definitions; coordinate with legal departments on requirements; negotiate agreements with sister agencies; seek technical improvements for contractor payments; increase frequency of checks; and develop processes regarding indebtedness among elected officials.
The Office serves as a watchdog promoting integrity by identifying corruption or mismanagement within Chicago government.
