Iowa state auditor slams bill that would limit state watchdog

DES MOINES — Limits would be placed on what personal information the state taxpayers’ watchdog could demand during an audit under legislation being advanced by state lawmakers.

How Senate File 478 would impact the state auditor’s ability to conduct investigations in an independent, nonpartisan fashion is the subject of stark disagreement between the current state auditor and the lawmaker who crafted the legislation.

Sen. Michael Bousselot, a Republican from Ankeny, said the legislation was designed to protect the privacy of Iowans’ personal information and to clarify questions that were raised during a 2021 Iowa Supreme Court case that pondered the auditor’s authority.

However, Iowa Auditor Rob Sand, a Democrat, insisted the proposal would severely restrict the office’s ability to perform audits.

A bipartisan coalition of state auditors and the leader of the national organization that represents state auditors agrees with him.

Sand said during a Thursday news conference at the Capitol the proposal would embolden the subjects of state audits to withhold information that is necessary to complete investigations, hampering the office’s ability to root out government malfeasance.

Sand also warned that if agencies withhold information, the auditor’s office may not be able to complete investigations, which would jeopardize federal funding for some state programs.

“This bill would give veto power to anyone who doesn’t want us to look at what they’re doing with taxpayer money,” Sand said. “I’m not pulling your chain about how serious this is.

“This bill is a big mistake that can have catastrophic impacts for the state’s financial situation, as well as allowing waste, fraud and abuse to be hidden by whoever’s conducting it.”

The Iowa Senate passed the bill earlier this week with only Republican support. It is now eligible for consideration in the Iowa House.

What’s proposed

Under the proposal, the auditor’s office during an audit could not demand 11 types of personal information, including criminal files, law enforcement investigative documents, income tax returns, medical files, public health records, educational records and any other personal information that an individual would “reasonably” expect to be kept private or is unnecessary for the audit.

The auditor’s office could get that information only if the office proves it is relevant to the audit, the party being investigated agrees to hand over the information, and the information is altered so individuals cannot be identified.

Bousselot said he wrote the bill to answer questions raised during a 2021 Iowa Supreme Court case involving the auditor’s office’s subpoena of records from the University of Iowa regarding its $1 billion, 50-year lease of its utility system. In that case, the court considered the scope of audits and authority of the state auditor’s office.

The Supreme Court in that case ruled unanimously in the auditor’s office’s favor.

“This is about protecting privacy. Privacy isn’t partisan,” Bousselot said in a statement. “The bill answers questions raised by the Iowa Supreme Court in 2021: when an audit begins, what information is confidential, and how disputes are resolved. The bill ensures the auditor has access to relevant information in an audit but confidential, personal information is protected.”

Bousselot said he presented the proposed legislation to the state treasurer and the Department of Management — both led by Republicans — and to the Iowa Board of Regents and to private accounting firms.

“I have full faith this (legislation) complies with Government Auditing Standards (which Bousselot notes are referenced in the bill) while protecting Iowans’ privacy,” he said.

Pushback

Sand — and other state auditors, both Democrat and Republican — disagree and say the proposal would hinder the auditor’s office’s ability to conduct audits.

A letter from the National Auditors Association, written by the organization’s president and signed by 26 other state auditors, says the proposal would “negatively impact the auditor’s ability to independently and sufficiently perform his audit work.”

“State auditors should have unfettered access to confidential records to ensure that state agencies are following their policies and procedures and state and federal law,” the letter stated. “This is also necessary to ensure that we prevent waste, fraud, and abuse of state programs and funds.”

State auditors also have the immense responsibility to guard against disclosure of any confidential information. It is a responsibility we take seriously.”

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