State Auditor Rob Sand found that about $450,000 of federal COVID-19 relief funds went to pay salaries for governor staff members. (Documents from Iowa State Auditor’s Office, Photo by Katie Akin/Iowa Capital Dispatch)
Gov. Kim Reynolds improperly used $450,000 of federal COVID-19 relief funds to pay 21 staff members, according to a new state audit.
Iowa State Auditor Rob Sand released the report on Monday. It reveals that the Office of the Governor used $448,448 of federal coronavirus relief funds to pay salaries and benefits for 21 employees between March 2020 and June 2020.
Federal funds were eligible to pay the salaries of government employees who were “substantially dedicated” to responding to COVID-19. In response to the audit, a statement from the governor’s office said the salaries were a legitimate use of the federal money.
In a statement in the auditor’s report, the governor’s office calls the use of federal money to reimburse employees an “allowable expense,” based on communications with the state auditor’s office and U.S. Treasury. “The only issue is what documentation is necessary to prove that Governor’s Office employees were responding to the pandemic from March 15, 2020 through June 30, 2020,” the governor’s office stated.
Reynolds addressed the issue at a press conference in September 2020, saying it was “very clear” the federal funds could be used for staff salaries. She said half of her staff worked out of the state emergency operations center “seven days a week, straight, probably nine to 10-hour days, on COVID-19.”
Sand, however, said the governor’s office has so far failed to prove that the 21 employees were dedicated to the COVID-19 pandemic during that three-month time span. Sand included in the report a spreadsheet from the state Department of Homeland Security and Emergency Management that listed the $448,448 as “FY 2020 Shortfall.” A subsequent version of the spreadsheet had the same section labeled as COVID-19 Personnel Costs.
“The Governor had more staff than she could pay, so she used pandemic funds. A spreadsheet was altered to look like the $ shortfall was COVID related,” Sand tweeted on Tuesday morning. “We warned her over a year ago it would be difficult for that to be a qualifying use. Here we are.”
The auditor’s report recommends that, if the governor cannot prove that the salaries were a legitimate use of the federal funds, the $450,000 should be returned to Iowa’s coronavirus relief fund.
This is not the first state audit to find that Reynolds misused federal COVID-19 funds. Sand reported in October 2020 that the governor wrongfully allocated $21 million to pay for the state’s transition to Workday software. Reynolds argued that the updated software was a pandemic expense, as it would allow the state to run more efficiently.
Reynolds returned the $21 million in December. The Legislature passed a budget several months later that allocated $21 million of state funds to the Workday contract.
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