Audit: $380,000 in improper spending at Iowa Communications Network

Executive Director Richard Lumbard, of Marion, fired Jan. 4

Auditor of State Mary Mosiman waits for the start of the Condition of the State address at the State Capitol Building in Des Moines on Tuesday, January 14, 2014. (Stephen Mally/The Gazette-KCRG TV9)
Auditor of State Mary Mosiman waits for the start of the Condition of the State address at the State Capitol Building in Des Moines on Tuesday, January 14, 2014. (Stephen Mally/The Gazette-KCRG TV9)

The State Auditor has identified $379,500 in improper disbursements and undeposited collections resulting from management decisions “not in the taxpayers’ best interest,” by the former executive director of the Iowa Communications Network.

Richard Lumbard, of Marion, led the ICN, the state government’s distance learning and broadband carrier network, from 2014 until he was fired Jan. 4. The audit released Thursday covers January 1, 2015, through January 2.

Lumbard’s actions raised alarm bells for his staff last summer when he pushed for the purchase of two pre-owned semi-trailers containing video production equipment, the audit states.

The trailers were delivered to Wind and Fire Ministries Mission Base, in Marion, which Lumbard serves as Chief Executive Officer, auditors found. Lumbard later directed people to sell equipment from the trailers on eBay under the vendor name COH Logistics, an organization with which Lumbard also is affiliated.

“Proceeds from the equipment sold, which totaled $2,319.00, were not deposited with ICN,” the audit states.

Among other improper disbursements noted in the audit were:

• $50,000 for Lumbard’s use of state vehicles from Marion to Des Moines, despite Iowa Department of Administrative Services rules prohibiting personal use of state vehicles,

• $12,800 for an ICN leadership retreat at a resort in Whalen, Minn.,

• $3,311 for unrecorded vacation days Lumbard and his secretary, Jessica Jensen, took to Belize.

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Auditors also noted Lumbard did not use competitive-bidding procedures when hiring vendors, gave Jensen excessive raises and hired another employee who did not meet required qualifications.

“His actions resulted in payroll costs which were not reasonable or necessary for ICN operations,” the audit said.

Lumbard took an extended medical leave from the ICN in 2017. He and several, Jensen and several other employees have since been let go. Lumbard’s total compensation for the year that ended June 30 was $137,949, state records show.

The ICN released a statement Thursday afternoon saying the misspending outlined in the audit was isolated to Lumbard.

“The actions of Mr. Lumbard fall short of the standards we set for ourselves and that our users and the public have a right to expect from public employees,” Philip Groner, acting executive director, said in the statement.

“As the audit report indicates, as soon as we became aware of suspicious activity regarding the trailer equipment, we immediately notified the Attorney General’s Office and the State Auditor.” said Philip Groner, acting executive director, in the statement. “We fully cooperated with the Auditor’s investigation, and turned over all requested information.”

Groner said the ICN staff have put in place control measures, such as dual approval for purchases, that should prevent future incidents.

Copies of the audit have been filed with the Iowa Division of Criminal Investigation, the Polk County Attorney’s Office and the Attorney General’s Office, the state auditor reported.

l Comments: (319) 339-3157; erin.jordan@thegazette.com

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