Iowa’s governor used federal COVID relief funds to pay her own staff’s salaries and cover a pre-existing budget shortfall, the state’s auditor said in a report released Monday.
The report accused Gov. Kim Reynolds’ (R) office of using nearly $450,000 from the federal Coronavirus Relief Fund — part of the CARES Act meant to help local governments deal with COVID — to pay the salaries and benefits of 21 staffers from mid-March through June 2020.
Though the money was used to pay staff in the governor’s office, it was taken from the Iowa Department of Homeland Security and Emergency Management’s COVID response funds — even though the staffers paid with the money didn’t qualify for the COVID money, state auditor Rob Sand found. The blog Bleeding Heartland first reported the payments in September.
A spokesperson for Reynolds told auditors that during the time period in question, the governor’s office was focused on COVID response — but, “Documentation to support this conclusion was never provided,” the report noted. Reynolds’ office also has not provided documentation describing how the money was allocated, nor anything describing the time each staffer spent on COVID, the report said.
Reynolds spokesperson Alex Murphy did not immediately return TPM’s request for comment, but he told The Associated Press in a statement that “During this time, the Governor’s staff spent a vast majority of their time responding to the pandemic. In fact, many members of Gov. Reynolds’ staff worked seven days a week out of the State Emergency Operation Center to provide direct support to Iowans.”
“This has always been our justification for the expense,” the statement added. “We are now working with Treasury to provide them documentation, per their request.”
What’s more, the audit report noted, budget documents from the state Homeland Security and Emergency Management office show that the nearly $450,000 paid in salaries for Reynolds’ staffers “represents a budget shortfall and an overspending of the Governor’s appropriation.”
“What is not clear, is why these salaries were not included in the Governor’s budget set prior to the fiscal year and prior to the Pandemic,” the report said. “Based on this information, we conclude that the budget shortfall was not a result of the Pandemic.”
In other words, the report concluded, “it appears more likely the CARES funds were used to cover a budget shortfall that was not a result of the pandemic.”
Budget documents from the Homeland Security and Emergency Management office even showed a revealing change: A column tallying the money sent to the governor’s office was originally labeled “FY 2020 Shortfall,” but a subsequent revision changed the column — to “COVID-19 Personnel Costs.”
“That spreadsheet that shows they changed the headers to basically instead of say shortfall to say COVID 19 is a pretty big deal,” Sand told The Associated Press.
The state auditor noted that they’d shared their findings with the U.S. Treasury’s inspector general — that office requested in January that the state review the salary expenses — and that “the Treasury OIG reviewed and concurred with this finding.”
