Lawmakers looking into what happend with school board association

DES MOINES – State lawmakers lashed out during a hearing Monday on alleged wrongdoing and misspent funds inside the Iowa Association of School Boards.

The Legislature's Government Oversight Committee is looking into problems at the IASB, a nonprofit organization.

The association's board last week put executive director Maxine Kilcrease on paid administrative leave until an investigation can be completed.

IASB spokeswoman Megan Forgrave said an investigation is looking into how Kilcrease had been paid more than she should have.

Kilcrease's three-year contract was for a $210,000 per year salary; the rate at which she was being paid would amount to $367,000 per year, Forgrave said. Kilcrease also raised the salaries of three other association employees, officials said.

Consultant Kevin Schick replaced the organization's chief financial officer, but has resigned. He has since been investigated for allegedly using association credit cards for airplane tickets to Bora Bora not related to business travel, Forgrave said.

Sen. Tom Courtney, D-Burlington, compared the people involved in the alleged fraud to “common thieves.”

“We spend over $3 billion a year in this state on education and these people found a way to steal some of it,” Courtney said.

About one-third of the organization's cash flow comes from member dues paid by school districts, area education agencies and community colleges.

Courtney drew comparisons to the CIETC scandal in recent years that centered around inflated salaries and bonuses at a Des Moines job agency that received taxpayer funding.

“This is outrageous. I hope the FBI gets involved. I hope they all wind up in prison; I hope they're there for 100 years,” Courtney said.

Committee Co-Chair and Sen. Rich Olive, D-Story City, used an expletive to describe how Iowans and members of the oversight committee feel about what went on.

“We are not happy that suddenly we have to call people into oversight to look into the misuse of taxpayer dollars,” Olive said.

IASB has retained the Brick Gentry law firm as outside legal counsel, which also is investigating internal whistle-blower complaints.

Attorney Nolden Gentry said an agent from the Federal Bureau of Investigation has called inquiring about actions by the association.

Gov. Chet Culver expressed concern Monday over what's happening with IASB.

“We are relying primarily on the attorney general's office to investigate and determine any criminal wrongdoing,” Culver said.

The board has been aware of financial issues for the past several months, Forgrave said.

The board's regular auditors currently are conducting a 2009 audit expected to be completed in May.

Forgrave said they don't know yet the size of their budget shortfall while the audit is being completed.

“That's one thing we're trying to get a handle on,” Forgrave said.

The association's board's past president Jack Hill requested to take a leave of absence until things are sorted out, Forgrave said.

An outside firm, LWBJ Financial, is doing forensic auditing to look for fraud. Forgrave said at this point they have not yet found anything that would point to that.

The legislative oversight committee is expected to continue its hearing on the issue Tuesday.