Follow-up to OIG’s Audit of the Designating Municipal Depositories

Executive Summary

The purpose of the 2021 audit was to determine whether DOF ensured that banks applying for municipal depository designations submitted the required information, and whether DOF used the information to ensure that the City partners with institutions that not only have the capacity to fulfill its banking needs, but also provide inclusive and equitable financial services across Chicago’s communities. OIG found that although DOF ensured that banks submitted all documentation required by the Request for Proposals (RFP), it did not evaluate whether the banks provided inclusive and equitable financial services throughout Chicago. Furthermore, OIG found that DOF, City Council, and the City of Chicago Treasurer’s Office had not coordinated their roles in the municipal depository designation process to achieve the City’s inclusivity and equity goals.

Based on the results of the audit, OIG recommended that DOF, in collaboration with City Council’s Committee on Finance, develop and implement a process to evaluate banks’ lending and deposit records for equitable financial services provision. OIG recommended that the process include provisions related to sharing evaluation results with Council and applicant banks. OIG also recommended that DOF collaborate with Council and the Treasurer’s Office to develop a coordinated municipal depository designation process that aligns with the City’s equitable banking goals and allows the City to deposit public funds with banks that share and live up to those goals. In its response to the audit, DOF described corrective actions it would take.