Auditor: Iowa State University director diverted, improperly pocketed $324,816
'University officials should take an active role in identifying unreported conflicts of interest'
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After investigating conflict of interest concerns involving the former director of Iowa State University’s Center for Agricultural Law and Taxation, State Auditor Mary Mosiman has identified $324,816 in diverted collections and improper and unsupported disbursements.
According to an investigative report made public Tuesday, Roger McEowen diverted $280,170.83 into his personal and business bank accounts, including proceeds from textbook sales and payments for conference and seminar presentations.
Another $43,612.98 in improper Iowa State disbursements included excess vacation expenses and improper vacation payout; payment to McEowen on days he presented on behalf of his private company at conferences and seminars; and exaggerated or inappropriate travel expenses.
An additional $1,032 in unsupported disbursements included travel compensation.
The report summarizing the auditor’s investigation — which looked back between April 2009 and December 2015 — focused on the fact McEowen ran a personal side business, McEowen, PLC, which specialized in consulting services, educational speaking, legal writing, and the practice of law.
McEowen listed that business on conflict of interest forms.
“However, the disclosures were not specific enough for university officials to determine the services provided by McEowen, PLC, were virtually the same as the services provided by (the ISU center he directed,)” according to the report.
The auditor also uncovered concerns involving nepotism, use of staff resources, and lack of university control and follow-up. Because the university didn’t dig deeper into McEowen’s reported conflict, it did not create a management plan.
“Implementation of a management plan which addresses the potential conflicts identified by employees is a fiduciary responsibility of the university,” according to the audit report.
The audit found the university and the center involved in this case “do not attempt to verify the information provided by the employees is complete or accurate. They, instead, rely on an employee’s ethics to properly disclose all potential conflicts.
“Such reliance is not sufficient,” according to the report. “University officials should take an active role in identifying unreported conflicts of interest.”
Based on testing and observations, the state auditor determined, “It was not difficult for the former director of (Center for Agricultural Law and Taxation) to establish a business which represented a conflict of interest and use his position as the director of CALT to further the interests of the business he created.”
McEowen did not return a phone call and email from The Gazette.
He started at Iowa State in August 2004 as a tenured associate professor and was appointed director of the center in December 2006. The Board of Regents notified the state auditor about concerns regarding McEowen in May 2015, and he was placed on paid administrative leave on Dec. 16, 2015.
He resigned on Jan. 5, 2016.
On Feb. 23, CliftonLarsonAllen Wealth Advisors LLC, which bills itself as a firm that delivers wealth advisory, outsourcing, and public accounting capabilities, announced it had hired McEowen as agribusiness and cooperatives tax director for its Des Moines office.
“We are ecstatic with Roger McEowen’s addition to CliftonLarsonAllen,” managing principal Mark Wyzgowski said at the time in a news release, which boasted of McEowen’s years of experience at Iowa State and his prominence as an author and speaker.
“I am pleased to be working with the CLA team and look forward to expanding CLA’s client services in the agricultural sector with additional educational seminars,” McEowen said in the news release.
McEowen, PLC, remains an active business, according to Iowa’s Secretary of State. McEowen is listed online as an employee with CLA, and Wyzgowski told The Gazette he cannot comment on personnel issues.
Among the report’s highlights, it notes that Iowa State’s extension office has a conflict of interest policy prohibiting “consulting in the state of Iowa for personal gain.” Yet investigators determined McEowen deposited honorariums for Iowa speaking engagements.
He also scheduled summer conferences across the country for the Iowa State center, “which was established to address the needs of Iowans.”
“As a result, it is unclear what benefit is provided by the conferences held outside Iowa,” according to the report.
Iowa State staff said McEowen was behind the summer events, which were to be held in “luxurious resorts across the country.”
“Staff reported the expenses for the two-day seminars are quite high and the attendance numbers are generally low,” according to the report.
Auditors in the report list several recommendations for Iowa State, including requiring employees to provide more detail on conflict of interest forms and following up with reported conflicts. The report also suggests tightening controls around employee vacation requests and generally implementing procedures to ensure compliance with policies in place.
John McCarroll, a spokesman for Iowa State, said the institution and the center at issue are “carefully reviewing the findings and recommendations of the state audit report to see how we can improve our policies and procedures related to fiscal responsibilities, conflict of interest and proper accounting and management of personal businesses.”
The university is searching for a new permanent director of its center, and applications are due Oct. 1. John Lawrence, associate dean in the College of Agriculture and Life Sciences, has been serving in the interim.
The auditor’s report also was provided to the Iowa Attorney General, Division of Criminal Investigation, Story County Attorney, internal audit at the Board of Regents and the Iowa State University Department of Public Safety.
“We will wait to hear from those agencies and offices about any legal action that might initiate before the university takes further steps,” McCarroll said.