State auditor: Iowa contractor misused or mishandled $180,000 in federal grant funds

A state contractor that provides outpatient mental health and addiction treatment services misused and mishandled tens of thousands of dollars in federal grant funds, according to findings of a special investigation released this week by Iowa State Auditor Rob Sand.

The auditor’s report identified more than $180,000 in questioned or improper spending by Crossroads Behavioral Health Services, a nonprofit contracted by the Iowa Department of Health and Human Services to provide mental health and addiction services in southern Iowa.

The probe — requested by Iowa HHS in March 2024 after concerns that Crossroads had failed to reimburse a subcontractor and may have misused federal grant dollars — reviewed transactions between July 1, 2022, and June 30, 2024.

Sand reported auditors found $167,716 in questioned costs, including unallowable expenses and unpaid reimbursements owed to Zion Integrated Behavioral Health Services, which subcontracted with Crossroads for several federal prevention and treatment grants. Those questioned costs include:

The auditor’s office also identified $14,168 in improper disbursements using county opioid settlement funds and $195 in unsupported purchases, including mileage and supply reimbursements for which Crossroads could not produce documentation.

According to the report, Zion began notifying Crossroads in August 2023 of missed payments dating back several months. After initially telling Zion it could not pay the full amount owed, Crossroads proposed an 18-month payment plan — a proposal Zion rejected as it informed Iowa HHS that nearly $200,000 in subcontracted prevention work had gone unpaid.

By early February 2024, Zion formally notified state officials that Crossroads had defaulted on multiple federal grant agreements, according to the report. When HHS contacted Crossroads, the agency said it was trying to sell property to “free up” money and had used funds to “keep the business open” rather than pay its subcontractor. Zion then demanded full payment of $212,478 within 30 days and warned it might stop providing services in southwest Iowa. The following month, HHS circulated an internal memo flagging a possible misappropriation of federal funds and began withholding payments to Crossroads while contract enforcement efforts moved forward, according to the auditor’s office.

The investigation found Crossroads kept all funding streams — including federal grants and county opioid settlement dollars — in a single bank account without separating them by program or accounting code. Investigators reviewed all receipts and expenditures tied to public funds and evaluated whether opioid-related spending was reasonable, improper or unsupported.

The review found Crossroads had 11 checks bounce for insufficient funds and incurred 77 overdraft charges totaling $5,074. In addition, auditors found Crossroads had received opioid settlement dollars from Adams, Adair and Union counties without any signed agreements outlining how the money was to be used.

The report also faulted Iowa HHS for inadequate oversight. In response to the findings, Sand recommended the state agency strengthen internal controls, including closer monitoring of grant payments and subcontractor reimbursements.

Copies of the investigation have been forwarded to the Polk County Attorney’s Office, the Iowa Attorney General’s Office and the Division of Criminal Investigation. The full report is available at www.auditor.iowa.gov under Special Interest Reports.

Iowa partners with Ancestry.com to digitize more than a million state archival records

The State Historical Society of Iowa has partnered with Ancestry.com to make more than 1 million additional state archival records available to the public, the agency announced Tuesday.

Under the agreement, Ancestry digitized millions of pages from the State Archives at no cost to Iowa taxpayers as part of a two-year project. The newly available materials include vital records; state military files such as Iowa National Guard enlistment documents and World War I and World War II casualty records; Fort Madison penitentiary convict registers, Bertillon cards and mug shots.

Jaren Akenheads, Ancestry’s senior manager of content acquisition, said in a statement the company was “excited to partner with the State Historical Society of Iowa to digitize these important collections at no cost to the taxpayers of Iowa,” noting their value to genealogists in Iowa and around the world.

“Digitizing this context will help preserve their rich history and increase their accessibility beyond the wall of the Archive,” Akenheads said.

Iowans can access the records for free at the State Historical Society’s Research Center through its institutional Ancestry account, or via a personal paid subscription. Newly scanned documents will be added to Ancestry’s searchable database on a rolling schedule as processing is completed, according to a news release.

Hinson introduces bill to let families use education savings plans for child care

U.S. Reps. Ashley Hinson, R-Iowa, and Kristen McDonald Rivet, D-Mich., introduced a bipartisan bill aimed at helping families pay for child care by expanding the use of 529 education savings accounts.

  Buy Photo

The Early Education Savings Program Act would expands 529 savings programs to cover qualified child care expenses, allowing parents to use tax-free income on child care — including care provided by licensed centers, regulated home-based providers and other approved caregivers. The accounts could be used for children under 5, with no cap on contributions for child care purposes.

Hinson, a working mother of two boys from Marion, said expanding savings options would help families better manage rising care costs and support workforce participation.

“Access to child care is a women’s issue, a family issue, and a workforce issue, and no two families have the same needs or circumstances,” Hinson said in a statement. “... I’ll continue working across the aisle to make child care more affordable, flexible, and accessible for families because supporting parents strengthens our workforce and helps build a stronger economy, and community, for everyone.”

Advocates say child care shortages and high costs are constraining employment nationally. The U.S. Chamber of Commerce estimates states lose about $1 billion annually in economic activity because workers cannot access stable, affordable child care. The study also found that absences and employee turnover, which often stem from a lack of child care, cost employers between $400 million and $3 billion a year.