A decade after misuse investigation, new ISU Flight Service audit raises concerns

Nearly a decade after an investigation into Iowa State University’s Flight Service incited a Board of Regents reprimand of former ISU President Steven Leath — who paid back tens of thousands for misusing school-owned planes and pushed for sweeping changes to the department before leaving his job altogether — auditors again have uncovered “unacceptable weaknesses” in the ISU Flight Service unit.

“Flight Service operations manuals include expectations for flight trip approval; however, corresponding procedures are not documented,” according to a June 2025 ISU Flight Service audit presented to regents last week. “Flight trips are requested through various formats including telephone calls, text message, and email communication — which does not allow for readily accessible records nor properly documented business purposes.”

The initial investigation into ISU Flight Service started a decade ago after Leath — a certified pilot who completed his training while at Iowa State — experienced a hard landing in 2015, causing about $14,000 in damage to a school-owned Cirrus SR-22 he’d been using almost exclusively since Iowa State bought it with $470,000 of ISU Foundation dollars in 2014, two years after he arrived.

The school in 2014 also bought a Beachcraft King Air 350 for $2.9 million using ISU Foundation dollars designated for Athletics. Auditors reported 43 percent of the King Air miles were used by Athletics and 28 percent for presidential or general campus needs, while Leath was the pilot or passenger on 72 of 76 trips on the Cirrus between August 2014 and September 2016, most of which were labeled proficiency or certification training.

With his hard landing and personal use of the plane under the microscope, Leath repaid the university more than $36,000 and sold the Cirrus for $450,000 in 2017.

Before leaving for the presidency at Auburn University that year, Leath considered eliminating ISU Flight Service altogether — but administrators instead decided in June 2018 to transfer Flight Service from its Facilities, Planning and Management Division to its Athletics Department.

‘Zero-dollar Cessna’

The new audit out this month reports ISU Flight Service — located in the Ames Municipal Airport — today operates just one plane, a 2004 Cessna, and employs two full-time pilots, including a chief pilot who serves as Flight Service director. It uses two flight-scheduling and airplane maintenance-tracking software services: Airplane Manager and Traxxall.

Auditors found the Flight Service gets most of its funding from Athletics, the ISU Foundation, and the President’s Office — depending on the average-use percentage over six years. For the current budget year, the split was 89 percent Athletics, 8 percent Foundation, and 3 percent President’s Office.

The Foundation in December 2023 facilitated the “zero-dollar” Cessna acquisition — assigning the title to Iowa State — and in April 2024 sold the B300 King Air “due to increasing maintenance costs.”

But, according to the audit, “Sale of the King Air and purchase of the Cessna airplanes were not recorded timely for inclusion on the asset inventory, resulting in inaccurate financial reporting.”

As of October 2024, six months after the King Air sale and 10 months after the Cessna acquisition, “capital asset records had not been updated” according to ISU policy requiring donated acquisitions “be handled through the normal procurement process.”

“The receiving unit is to be advised to coordinate with the ISU Foundation to ensure all campus gift requirements are met and the gift is properly acknowledged and recorded,” according to auditors. “Procurement Services involvement in the zero-dollar acquisition of the Cessna was inconsistent with typical processes, resulting in a failure to properly record the asset.”

Because the King Air sale also wasn’t reported to the Financial Accounting and Reporting Department, the ISU controller had to reopen the 2024 “general ledger” to add and remove the assets.

Auditors also found fault in Iowa State’s handling of the King Air proceeds — in that they were not deposited into an ISU account, per policy, but rather an ISU Foundation account and used to offset costs for the new plane.

In addressing that concern, ISU officials said the problem lies with the policy — which they planned to modify for “unusual transactions that don’t fit under the current ISU surplus disposal policy.”

“Selling an asset, similar to an airplane, is not an asset that is best sold on a surplus website with office furniture and other low-cost, high-volume assets,” according to Iowa State’s audit response.

‘Inaccurate charges’

Auditors also flagged concerns over security at the airport hangar, reporting 191 people have card access and seven have key access to the space. Of the 191 cardholders, most of whom have access at all hours, only 21 are Athletics or Flight Service employees — with the rest working for ISU facilities or information technology.

“Flight Service should create a process to review all card and key access on a regular basis and revoke access to individuals who do not have a critical reason for accessing the ISU airport hangar,” auditors suggested.

Regarding client billing, the audit found Flight Service does not consistently bill based on actual flight hours — instead using an estimate — “resulting in inaccurate charges to the customer.”

Five invoices reviewed for trips taken from January 2024 to October 2024 found three used estimated hours — resulting in an overcharge of $2,270.80.

“Additionally, invoices are not consistently billed in a timely manner, increasing the risk that trips are not accounted for and cause inaccurate financial reporting,” according to the audit that found for flights taken from January to October 2024, the average number of days between flight and invoice was 49 — with the longest reaching 119 days.

“No time frame expectation for flight trip invoicing exists due to invoicing procedures not being documented,” auditors reported, suggesting, “Flight Service should document the internal billing process and define how to authenticate that actual flight hours are used for internal billing.”

Auditors took issue with Iowa State’s flight tracking software purchases — which were not approved by procurement services, per Flight Service guidelines, “resulting in insufficient review of legal, financial, and system functionality consistent with university expectations and best practices.”

Flight Service purchased two web-based software tracking systems: Airplane Manager for $150 a month and Traxxall for $4,500 a year.

“Additionally, Traxxall required a signed contract by ISU,” according to auditors. “The contract was signed by the director of Flight Service, who does not have signing authority on behalf of the university.”

ISU, in response, said Flight Service going forward will work with procurement staff “in an appropriate manner.”

Addressing spotty flight documentation due to the many “pre-authorized” trips OK’d via phone calls and text messages, auditors suggested Iowa State update its operations manual to require documentation for both trips requiring authorization and for those that are pre-authorized — like for athlete recruitment, donor relations, or ISU meetings and events.

“In order to provide more transparency and accountability,” Iowa State agreed to start requiring Flight Service generate a pre-authorized-use notification.

“Additionally, supplemental documentation procedures will be created to include an email authorization to support each flight,” according to Iowa State, which committed to immediately address every one of the auditors’ concerns.

Vanessa Miller covers higher education for The Gazette.

Comments: (319) 339-3158; vanessa.miller@thegazette.com