Government staffing issues in small towns real, but no excuse for fraud, Iowa Auditor Sand says

JOHNSTON — Special investigations by the Iowa Auditor’s Office in 2023 revealed more than $756,000 in improper or undocumented spending or other forms of financial mismanagement by local government bodies.

That figure does not include hundreds of thousands more misused taxpayer dollars revealed by regular, periodic audits performed by the office.

The problem is especially pronounced in small towns, where there is insufficient staff and often insufficient oversight of government spending.

It’s a problem that Iowa Auditor Rob Sand acknowledges, but also says should not excuse fiscal irresponsibility by governments in small communities.

Sand discussed small-town government oversight issues and other topics while appearing on this weekend’s episode of “Iowa Press” on Iowa PBS.

“It’s a problem. There’s no doubt about it,” Sand said. “Sometimes, to some degree, we have to acknowledge that it can be hard to find the staff that have the training to do this sort of work in rural areas. … The bottom line is it’s tougher in rural Iowa. We can’t really let that excuse everything, though.”

Sand said local governments should be careful when making hires — he noted one instance where an individual in Iowa found to have mismanaged local finances had previously been charged with similar offenses — and that government bodies in small communities should police each other.

As an example, Sand pointed to a 2014 investigation that found a former secretary took more than $279,000 from the Mahaska County Soil and Water Conservation District. The same person also was in charge of financial accounts in Poweshiek County, but took no money from those accounts because, Sand said, every month a Poweshiek County Supervisor would ask to see bank statements.

“You want to make sure that you are, I like to say, leading others not into temptation,” Sand said. “Ask for the bank records. Look at them every month. Make sure that the person who is in charge of the money knows that you’re looking at the bank records every month. Because that way no matter what situation they’re in, they can avoid that temptation to abuse those tax dollars that they have access to.”

Sand said he would like the Iowa Legislature to raise the penalties for fraudulent use of taxpayer funds, including by creating a mandatory prison sentence for “large-scale theft” of taxpayer funds.

Sand said such a punishment could be effective because, unlike crimes of violence or passion, an individual may consider the heightened consequences before committing an illegal act.

“If you’re in a position of trust and a position of power over a large amount of tax dollars and you’re abusing them over a period of time, absolutely you should (face a mandatory prison sentence),” Sand said.

“Iowa Press” can be viewed on Iowa PBS at 7:30 p.m. Friday and noon on Sunday, and online any time at iowapbs.org.

Comments: (515) 355-1300, erin.murphy@thegazette.com

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