Iowa auditor Rob Sand barnstorms against bill that will restrict his watchdog role

Iowa State Auditor Rob Sand held news conferences, met with lawmakers and gathered letters from bipartisan leaders to try to stop a bill that would limit his access to state records.

But despite strong condemnation from nonpartisan and bipartisan auditors and CPA organizations, Republican lawmakers last month passed the bill.

With Senate File 478 now sitting on Gov. Kim Reynolds’ desk awaiting her expected signature, Sand is taking his case on the road.

He fielded questions from a small crowd in Cedar Rapids Tuesday, where he shared his opposition to the bill and urged Iowans to contact the governor’s office to voice their own concerns and opposition.

The lone Democrat elected to statewide office, Sand said the bill "is about politics and protecting insiders."

"When you give people in positions of power and trust the ability to hide corruption and waste that happens they’re responsible for, they will,“ he said. ”That’s what this bill does, bottom line.“

Republicans have denied claims the bill is a personal attack meant specifically to target Sand, and say the bill protects Iowans’ personal information and puts into state law general accounting standards.

However, critics of the legislation include the National State Auditors Association, the Institute of Internal Auditors, and former U.S. Comptroller General David Walker, who served under both Democratic and Republican presidents. They say the legislation would hamper the state auditor’s ability to prevent fraud and misuse of taxpayer funds.

Within 24 hours of its passage, about half of the country’s state auditors — Republicans and Democrats — signed a letter from Connecticut state auditor John Geragosian, president of the National State Auditors Association, on the association’s behalf that states the bill “will negatively impact Auditor Sand’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 reads.

The bill would restrict what private documents the auditor is allowed to access when auditing taxpayer-funded programs and activities, and makes changes to the state auditor’s subpoena power. The bill directs disputes over access to records between government offices and agencies to a three-member arbitration panel rather than a court.

The arbitration panel’s ruling would be final, with the auditor no longer able to challenge the decision in court.

The arbitration panel is comprised of the auditor’s office, the state department or agency that is being investigated, and a representative of the governor’s office.

Sand said that would allow any agency being audited to hide records from the auditor's office as long as the governor agrees, erasing the auditor’s access to Iowa courts for independent review.

“This bill doesn’t just restrict our office from reaching the courts, it removes the courts as a check on the executive branch,” Sand said.

A fiscal analysis by the nonpartisan Legislative Services Agency warns Senate File 478 could limit the ability of the state auditor to perform oversight on programs that total more than $12 billion.

The agency warns the bill may limit the scope of an audit performed by the auditor’s office, which could impact the state’s ability to comply with federal award requirements.

Denial of information requested by the auditor’s office for an audit would lead to a modified opinion stating the office was unable to obtain all documents needed to sufficiently audit to federal standards. That could potentially lead to federal agencies withholding, suspending or disallowing cash payments to the state through programs such as Medicaid, Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), the Children’s Health Insurance Program (CHIP) and others.

"The watchdog still has teeth," Sen. Mike Bousselot, the bill’s floor manager and a Republican from Ankeny, said on the Senate floor. "It’s just making sure that those teeth aren't getting sank into something they shouldn’t be in, which is Iowans’ most personal and private information."

LSA notes Iowa Code and federal law already maintain the strict confidentiality of information and records obtained during the course of an audit, including medical and student education records.

Auditors also are subject to the same restrictions and penalties as the custodian of records for improper disclosure.

Sand said he’s reached out to Reynold’s office seeking to discuss the bill and his concerns, but has received no response.

Reynolds’ office did not respond to a message Tuesday seeking comment.

“The auditor’s office is part of the executive branch. And I think Iowans expect the executive branch to be able to work things out. It puts a process in place that allows us to do that,” Reynolds said during an appearance on Iowa PBS "Iowa Press“ earlier this month.

“If my agencies have some conflict, we bring them in, we set them down, and we ask them to work it out. And … to go to the courts, to have executive branch agencies competing against each other, the taxpayers have to pay for it twice,” she said.

“And I just don’t think it’s unreasonable that we can’t come to some resolution through the arbitration process.”

Reynolds has until June 2 to sign the bill.

Should the bill become law, Sand said he and his office “are going to do what we’ve always done.”

“We’re going to ask for the documents that we ask for. We’re going to audit the things we think need to be audited,” he said. “And if they want to deny us access to records, we’ll cross those bridges.”

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