OIG Finds Department of Finance Lacks Tools for Managing and Addressing City Debt; At Least $8.1 Billion in Outstanding Debt Owed to the City

OIG Finds Department of Finance Lacks Tools for Managing and Addressing City Debt; At Least $8.1 Billion in Outstanding Debt Owed to the City


The City of Chicago Office of Inspector General (OIG) has completed an audit of the Department of Finance’s (DOF) management of outstanding debt owed to the City of Chicago, and found that DOF lacks foundational management tools for addressing the overall amount of outstanding debt owed to the City. As a result, outstanding debt totals at least $8.1 billion.


Debt owed to the City arises from various sources including overdue charges for City services, unpaid fines for Municipal Code violations, emergency medical services provided by the City, and additional interest and collection costs. OIG found that DOF, the entity responsible for supervision of all revenues owed to the City, does not have overarching policies, tools, or goals to manage and collect outstanding debt. Furthermore, DOF does not manage all debt and is not aware of the total amount managed by other City departments. In fact, no City department has knowledge or management oversight of all debt owed to the City, and the City may therefore be unable even to quantify the total outstanding debt; records suggest that total is at least $8.1 billion. Owing money to the City disproportionately impacts economically vulnerable residents, who may live in communities where fines and fees are highly concentrated and correlate with higher levels of poverty. Without comprehensive debt management, the City is poorly situated to plan and implement equitable debt collection strategies. 


“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, noting that some of the debt on the books dates back to the ‘90’s. “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,” said Witzburg.


OIG recommends that DOF establish policies and procedures to improve its management of outstanding debt. Specific recommendations include creating a formal debt management plan, standardizing definitions related to debt to enable cross-department coordination, supervising performance of collection agency contractors, and pursuing technical solutions to better track and collect debt.

In response to OIG’s audit findings and recommendations, DOF stated that it will,


•             work with City departments to ensure complete reporting of outstanding debt;

•             explore the ability to write off and eliminate uncollectible debt from its source systems;

•             work to ensure that City departments adhere to the Municipal Code of Chicago’s (MCC) definition of debt, including by incorporating this definition into manuals and training;

•             work with the Department of Law (DOL) to determine when debt checks are required and remind City departments of this requirement;

•             work with DOL to negotiate intergovernmental agreements with Sister Agencies to require debt checks when onboarding new employees;

•             explore technical improvements that would allow it to debt-check City contractors before payment, and work to increase the frequency of these checks; and

•             contact the Office of the City Clerk to assist in developing a process to refer indebtedness of elected officials.


Read the Report 

Read the full report, including departmental response, published on April 16, 2026. Go to:

https://igchicago.org/publications/dof-debt-management-audit/

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