Iowa judicial leaders plan court fees fix while state lawmakers press for proof of no fraud

DES MOINES — Iowa Judicial Branch officials plan to ask state lawmakers to simplify the state’s process of collecting and distributing court fees — a system that recently misdirected over $27.5 million to the wrong entities — while some lawmakers press court officials for proof there was no fraud.

Judicial Branch officials fielded questions from lawmakers on the Iowa House Oversight Committee during a two-hour hearing Wednesday at the Iowa Capitol. Lawmakers attempted to learn more from judicial branch officials about the erroneous distribution of court fees that, over the span of four years, resulted in three state funds being shorted millions each.

In Iowa, funds paid to the courts in fines, fees and penalties in criminal cases are distributed to various sources, including funds for victim compensation, emergency services, road infrastructure, county attorneys and the state’s general fund.

Under the state’s distribution system, clerks of courts enter court fees into a coding program that is supposed to channel those funds to the proper place. But the Iowa Judicial Branch in October revealed that coding errors sent more than $27.5 million to the state’s general fund instead of to some of those other state funds and programs. The courts had been investigating the issue for over two years.

According to the investigation, more than $10.4 million should have gone to the state fund that supports infrastructure work on roads and bridges, $7.2 million should have gone to a state program that helps victims of violent crimes with certain expenses and $4 million should have gone to a fund that supports juvenile detention homes.

A report from the National Center for State Courts, commissioned by the Iowa Judicial Branch, said state law changes in consecutive years, 2020 and 2021, to the court fees distribution system caused confusion that led to programming errors, which led to the misdirection of funds.

The report was conducted in 2023 and made public in October 2024.

The Judicial Branch also contracted with an Iowa consulting firm to analyze the newly implemented, corrective procedures.

During Wednesday’s hearing, Judicial Branch officials said they plan next year to propose legislation that would simplify the requirements in the state’s system for court fees collection and distribution.

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“Court debt statutory framework is incredibly complex. With a complex statutory framework, there are more decision points in our program. With more decision points, there are more opportunities for bugs and more opportunities for error,” Iowa State Court Administrator Bob Gast told the oversight committee. “To decrease this opportunity for error, we think it is beneficial to simplify the statutory framework. We intend to bring a comprehensive administrative bill forward next session to do so, and intend to seek feedback from all entities that are involved in collection, distribution and receipt of court debt.”

Republican legislators on the House Oversight Committee asked the Judicial Branch officials for documentation that proves no fraud occurred in the misdirection of court fees. The courts have said all fees were collected and distributed, that the error was only that funds were distributed to the wrong sources. None of the reviews conducted by the courts or independent agencies have found evidence of malfeasance.

“I think there’s a lot more information to be gathered by this committee as part of a comprehensive look at getting this fixed,” Rep. Charley Thomson, a Republican from Charles City who chairs the committee, said during Wednesday’s hearing.

Republican committee members also expressed concern over the resources the Judicial Branch already has committed to its review of the incident. In response to questions from Republican legislators, officials said the branch spent roughly $675,000 on the reviews by the national center and the West Des Moines-based consulting firm Zirous.

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Rep. Taylor Collins, a Republican from Mediapolis, asked officials why the Judicial Branch, in the interest of protecting taxpayers, did not seek the help of state agencies when conducting the reviews. Republicans also expressed frustration that court officials did not sooner notify lawmakers.

Gast said a decision was made to wait until the courts had more information on the scope of the problem before taking the issue to legislators and state agencies. Rep. Steven Holt, a Republican from Denison, said that delay gives the appearance the courts were trying to hide the issue.

“My biggest frustration is that — and the explanation was that you waited until you had a solution — and this is not something you can do that with. So we’re now sitting here,” Holt said during the hearing. “When you wait almost four years to tell us and the problem becomes $23 million worth (erroneously sent to the state’s general fund), it’s very frustrating that we were not told. It’s very frustrating that it was not identified to me or to other legislators that we needed to fix these issues that were in code that were causing you these problems. …

“That’s the frustration and the concern. And I think that if you had been more forthcoming early on, we wouldn’t be sitting here today.”

Court officials said the programming issues have been addressed and fees are no longer being misdirected. However, officials said the Judicial Branch does not have the legal authority to correct the erroneous allocations from previous budget years. That would require action by state lawmakers, court officials said.

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Thomson said he would like to see assurances that no fraud occurred before he would be willing to move money out of the state general fund back to the appropriate state agencies.

Over the course of the four state budget years that the programming errors were an issue, nearly $588 million in court debt was collected, according to Iowa Judicial Branch data.

Comments: (515) 355-1300, erin.murphy@thegazette.com

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