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Ex-DuPage housing director's credit card bills scrutinized by feds

Daily Herald On Guard: John Day bought gifts, cigars, health club membership

John Day, former executive director of the DuPage Housing Authority, used his agency-issued credit card to buy gifts for housing board members, satellite radio and a navigation system for his car, plus a $112-per-month health club membership.

Day's credit card, which had a $12,000 limit, often was used for travel and training expenses. But billing statements obtained by the Daily Herald show that it also was used at numerous local restaurants, some flower shops and a cigar store. He also purchased Internet and personal security accounts with the card.

Federal officials say such purchases were an inappropriate use of housing funds. DuPage County Board Chairman Dan Cronin said Tuesday the credit card purchases by Day and other housing authority employees reveal an “inappropriate pattern of conduct” at the agency, which faces the possibility of owing millions of dollars to the federal government.

“It showed a lack of respect for the taxpayers' dollars,” Cronin said.

Day, who stepped down from his longtime position March 2 after a series of federal audits critical of the Wheaton-based agency, wasn't available for comment.

The credit card expenses were among a list of “unallowable” transactions mentioned in the latest federal audit released last month by the U.S. Department of Housing and Urban Development.

That report found the housing authority improperly spent more than $5.8 million in Section 8 program funds and failed to adequately document another $4.7 million.

Federal officials said auditors specifically reviewed $13,632 in credit card purchases made between July 2008 through June 2010. They found examples of cigar-store purchases, airline tickets for spouses and a health club membership paid for with Day's credit card, officials said.

“It was federal housing money that they were given, and that's what they're using to pay the bills,” HUD spokeswoman Laura J. Feldman said. “But if the bills are not eligible expenditures, then they shouldn't be on the credit cards.”

Feldman said eligible expenses include travel costs, such as meals, hotels and airline tickets. But HUD and most federal agencies don't allow for the credit cards to be used when someone isn't traveling.

“If I went next door and had lunch, I could not use my government credit card for that,” she said, “nor could I use it treat my staff to lunch.”

Housing authority officials said they believe that's what happened when Day used the credit card for numerous meals at local restaurants. He told federal auditors that he considered the purchase of flowers, clothes and beverages for housing authority staffers to be an appropriate use of Section 8 program funds.

As for the $112-per-month health club membership, Day told auditors that it was part of his employment contract — something federal officials disputed.

While there was at least one example of Day reimbursing the authority for purchases he made on the card, such as $330.63 spent at a Washington D.C. cigar store, officials said that also isn't allowed.

“There's no need to put cigars on a government credit card,” said Feldman, adding that Day should have known the rules.

Former housing board members said they weren't aware that federal money was used on various purchases, including $529 on gifts for board members from Williams-Sonoma in Oak Brook.

On Tuesday, the interim director of the housing authority, Cathy Ficker Terrill, said all but two of the credit cards have been canceled. And the people who have credit cards — herself and the director of administration — haven't used them.

Terrill said the plan is to write a new credit card policy for the agency.

“We had no financial policies or controls that I could find that were any good,” she said.

John Day’s credit card charges