Auditor alleges misuse of state, federal funds by aging agency

By James Q. Lynch 

The Gazette

DES MOINES – Lawmakers already investigating alleged abuses of tax funds by the Iowa Association of School Board may take up an investigation of a central Iowa senior citizens agency that allegedly misspent state and federal funds.

Iowa Auditor David Vaudt reported that Aging Resources of Central Iowa (ARCI) has been prepaying expenses by establishing accounts with several vendors and purchasing gift cards rather than return unspent funds to the state treasury at the end of the fiscal year.

In an audit report this week, Vaudt said that appears to violate both state and federal law.

“It's clearly against the intent of budgeting practices, too,” according to Rep. Scott Raecker, R-Urbandale, who said he will ask the Legislature's Oversight Committee to consider holding hearings on the practice.

In a quick review of Vaudt's report, Raecker said it appeared the gift card purchases from grocery stores, pharmacies and other vendors may have been for legitimate purposes, “but clearly not allowed by law.”

“This raises significant concern,” said Raecker, who wants the money repaid.  “Every dime counts when you're laying off teachers.”

It appeared to him that ARCI, which requested additional funding each year, was prepaying vendors and buying gift cards for future purchases rather than turn back funds that we re not needed before the end of the fiscal year.

ARCI avoided returning $180,422 to the Iowa Department on Aging for fiscal years 2006-09 and at least $4,000 prior to fiscal 2006 by establishing the prepaid accounts, Vaudt said. It's not possible to determine if additional amounts had been prepaid prior to fiscal year 2006.

Of the $184,422 total, $143,422 was payments to vendors to establish accounts from which future goods or services could be purchased. It appears $41,000 for the purchase of gift cards which were to be distributed to clients at a future date. It appears, according to the report, $81,299 of the $143,422 paid to vendors for future goods or services and $6,900 of gift cards remained unspent as of June 30, 2009.

Vaudt's full report can be found at: http://auditor.iowa.gov/specials/9AgingResources.pdf.