(KWQC) - Iowa Gov. Kim Reynolds' use of $21 million in CARES Act funds for a new software system was “not an allowable use of funds,” State Auditor Rob Sand and the U.S. Treasury Department’s Inspector General said Monday.
They said in a joint media release that the governor has been directed to return those dollars to the Coronavirus Relief Fund and redeploy them for allowable uses.
Sand further advised Reynolds that using CARES Act dollars for “her personal staff was questionable and could lead to repayments being required if insufficient work was done related to the pandemic, or insufficient documentation was maintained,” according to the release.
The CARES Act, which created and funded the Coronavirus Relief Fund, gives states until the end of the year to spend their allotted funds, or the funds will be reclaimed.
Spending that does not comply with the CARES Act use restrictions, if not corrected by the end of the year, will have to be repaid to the federal government, Sand said last week in a letter to Dave Roederer, director of the Iowa Department of Management.
Sand said in the letter Reynolds spent $21 million of funds on Workday, an HR/accounting computer system intended to replace the state’s legacy mainframe system.
Reynolds' office justified the expenditure and said, “with Workday, the State of Iowa will be able to act quickly to assist essential government employees, giving them flexibility in a number of ways, such as requesting COVID-related hardship help, easier ways to request Family and Medical Leave Act leave types, and automate processes for donating leave, and borrowing leave,” Sand said in the letter.
“These expenditures are not ‘due to the public health emergency,’” Sand said in the letter. "The State signed a contract in 2019 for these expenditures prior to the emergence of COVID-19. The statement regarding how Workday affects state employees, a portion of whom are themselves working on the public health emergency, is essentially a restatement of the purpose of Workday in general, which did not change with the emergence of COVID19.
“That this expenditure does not meet the first requirement means that there is no need to address whether it meets the other two requirements. Spending $21 million on Workday is not an appropriate use of CRF funds. If the governor does not redeploy these dollars to a lawful use, they will have to be repaid to the federal government. That will result in a $21 million loss for Iowa taxpayers.”
Sand said in the letter he also reviewed Reynolds' decision to spend $448,449.00 of CRF dollars on salaries for her staff.
He said payroll expenses for public safety, public health, health care, human services, and similar employees whose services are substantially dedicated to mitigating or responding to the coronavirus public health emergency is eligible, but payroll or benefits expenses for employees whose work duties are not substantially dedicated to mitigating or responding to the coronavirus public health emergency is not eligible.
“Salaries may qualify only when certain conditions are met,” Sand said in the letter. “The work the Governor’s staff are doing that is directly related to the pandemic must be tracked separately from their ordinary work and supported with appropriate documentation. Only then may that portion of their salaries qualify, and not if the work is only indirectly related to the pandemic.”
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State auditor: Iowa Gov. Reynolds' use of pandemic relief funds for software system not allowable - KWQC
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