$12 billion ‘Pro-Corruption’ Bill Slated For Debate In Iowa House

Iowa House Republicans have a big decision to make: Vote to limit the Iowa Auditor of State Office’s ability to adequately audit over $12.1 billion in state funds or vote to maintain long-held and electorally-decided checks and balances in state government.

A fiscal note for SF 478 was released on Friday by the nonpartisan Iowa Legislative Services Agency (LSA) and it confirmed what State Auditor Rob Sand (D) and others have said about the bill and the potential ramifications it poses were it to become law.

“Senate File 478 may impact the scope of an audit performed by the AOS, which may impact the State’s ability to comply with federal award requirements,” the fiscal note states. “A major federal program that loses its low-risk determination as a result of the AOS disclaiming its opinion will need to be audited each audit period.” 

“An increase in audit frequency could increase costs to the State; however, the fiscal impact cannot be determined. The State’s noncompliance with CFR Part 200 may result in the federal awarding agency taking action.”

The fiscal note pointed out the $12.1 billion in state funds the state auditor’s office oversees, but it did not include the additional billions in the budgets of Iowa cities, county governments, or school districts the office is tasked with auditing.

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“This is the single most pro-corruption bill that has ever come out of the Iowa Legislature,” Sand said during a March press conference. “We’re hoping we can stop it before it becomes law. Let me be really clear about what it would do: Any audit that we are conducting, if the entity that we are auditing says that they don’t want us to look at a document and they get someone appointed by the governor to agree to it, that document remains hidden; we won’t see it.”

The bill is eligible for debate on the Iowa House floor after advancing last week, but as of Monday afternoon, it has not been placed on the debate calendar. Iowa Republicans hold the majority in the House and will decide the bill’s fate alongside that of Iowa’s financial protections.

Most Iowa House Democrats have made their opposition to the bill known and Rep. Amy Nielsen (D-North Liberty) called it politically motivated during a subcommittee two days before the fiscal note came out. Sand is the only Democrat who holds statewide office in Iowa.

“This bill is crazy inappropriate for us to even be looking at,” she said. “If we’re going to do this to the auditor, then we need to do this to the attorney general and the treasurer and not just pick on one person because, let’s just be honest here, we’re picking on the person in the office and not the office.”

Rep. Bobby Kaufmann (R-Wilton), son of Iowa GOP chairman Jeff Kaufmann and the bill’s manager in the House, refuted Nielsen’s allegations despite the fact the bill very obviously singles out Sand.

“For whatever my personal opinion’s worth, this has nothing to do with the individual holding the current office from my personal perspective—I can’t speak for anyone else—but I can say unequivocally that this has nothing to do with that,” Kaufmann said.  

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Iowa Republicans have framed the bill as a “privacy protection act” and as a way to keep the auditor’s office in line with “generally accepted government auditing standards,” which the office already adheres to. 

A few things poke holes into Republicans’ argument that this bill isn’t about Sand personally or his political affiliation. 

In the lead-up to last fast fall’s election, Gov. Kim Reynolds declared that she wants her “own AG” and “a state auditor that’s not trying to sue me every time they turn around.” 

She got her first wish when now Iowa Attorney General Brenna Bird, a Republican, defeated longtime officeholder and Democrat Tom Miller. The Republican-led legislature previously tried to limit Miller’s powers before he and Reynolds were able to work out a compromise.  The powers of Bird’s office are set to expand when Reynolds signs a government reorganization bill. Meanwhile, Sand narrowly survived his race and in the aftermath of the election became Iowa’s sole statewide elected Democrat.

Second, the original version of SF 478, a relatively noncontroversial proposal, was a Trojan horse. Minutes before the Iowa Senate was set to debate the one-page bill, Sen. Mike Bousselot (R-Ankeny) introduced a four-page amended version of the bill that changed the scope of the bill that neither Senate Democrats nor Sand had seen, provided input for or were made aware of until minutes before the debate.

The original bill

Amended version

Lastly, the bill prevents the office from staying in compliance with the government auditing standards it currently practices, according to the LSA fiscal note.

Independently elected by Iowa voters, “The Auditor of State is required by law to annually examine the books, accounts, and records of every state department and agency and conduct or arrange financial audits of every local governmental body receiving state funds, including counties, cities, and school districts,” state an LSA description of the office.

“The Auditor ensures that government is open and accountable to its citizens by providing independent, accurate, and timely audits of the financial operations of Iowa’s state and local governments,” the LSA’s description continues.

Informally, the auditor’s office is known as the watchdog for Iowa’s taxpayers, and critics have noted this bill takes away that ability.

“This bill is not just shortening the leash of the watchdog, it’s putting them in the crate and locking the door,” said Minority Leader Zach Wahls (D-Coralville) when the Iowa Senate debated SF 478 last month.

by Ty Rushing
04/03/23

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