GOP leaders block audit change needed to avoid $281K federal fine

The Iowa Statehouse. (Photo by Perry Beeman/Iowa Capital Dispatch)

The GOP majority in the state Legislature has declined to make a change in audit payments that Democratic Auditor Rob Sand says would save the state money and wipe out a $281,000 federal fine. 

Iowa Senate President Jake Chapman, R-Adel, blocked a move by Democratic Sen. Claire Celsi of West Des Moines to add the language to a budget bill on Wednesday. That action came after GOP leaders declined to address the issue last year.

State Sen. Jake Chapman is a Republican from Adel. (Photo courtesy of Iowa Legislature)

Sand has told lawmakers repeatedly since February 2020 said he could save taxpayers money by charging all state departments a fee set by administrative rule for audit services. Over time, that should save money by encouraging agencies to use less auditing time, in Sand’s view.

Departments can choose to use Sand’s office or a private firm for audits. Current law only allows Sand’s department to bill certain agencies for services, and the state’s annual appropriation isn’t covering the unbilled expenses, Sand said. He wants to be able to bill all departments equally, with the cost set through administrative rules that can be reviewed by a legislative panel. 

The proposed change could also keep the state out of hot water with the federal government. Before Sand took office, the federal government moved to fine the state for problems with audits of agencies that get federal money, Sand has said.

In a statement, Sand said the new system would help the state avoid a federal fine like the $281,000 assessed for actions before he took office involving the state auditing of departments that receive federal funds differently than others. 

Sand told lawmakers last year that federal officials had agreed to waive the fine if the state language was changed, but lawmakers have declined for two sessions. 

“This was communicated repeatedly to legislative leaders and they chose not to fix the problem,” Sand said. 

State Sen. Claire Celsi, D-West Des Moines. Photo courtesy of Iowa Legislature.

Celsi offered an amendment late Wednesday to an administration and regulation budget bill to add Sand’s proposal to state law. 

Celsi noted Sand has pushed state lawmakers for the change since February 2020, appearing at committee meetings. She said the change would save taxpayers’ money. 

Chapman ruled the amendment out of order because he said the legislation didn’t address the policy question involved. 

Senate Minority Leader Zach Wahls, D-Coralville, said he was disappointed Senate leaders would not allow debate. 

“The policy question at the heart of the amendment is a simple fix in how the auditor of this state is able to bill other agencies for the services that that office provides,” Wahls said. 

“The auditor has continued to work on this. It would save taxpayer money, tens if not hundred of thousands of dollars a year that Iowa taxpayers are on the hook for. A procedural move was used to block that from being fixed,” Wahls added. 

In an interview Thursday, Celsi suggested political reasons for the Republican majority’s refusal to debate the measure. 

“When somebody like Rob Sand, who’s very bright, has a good idea about how to run his department better, they’re not even going to let him air his idea,” Celsi said.

Rep. Mary Mascher, D-Iowa City, introduced language similar to Celsi’s in the House, but it was ruled out of order in that chamber, too. 

Sand, a Democrat, has said he may run for governor or the U.S. Senate.