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Costs of righting troubled Iowa authority mounting

New audit: Big raises, unexplained expenses under David Jamison

David Jamison
David Jamison

By Erin Murphy, Gazette-Lee Des Moines Bureau

DES MOINES — The costs of David Jamison’s questionable management of the Iowa Finance Authority continue to mount, with a state audit released Friday documenting a lackadaisical culture of charging unexplained hotel rooms, trips and meals to the public, awarding big raises to inner-circle employees and routinely ignoring state rules on claiming mileage reimbursements, consuming alcohol on the job and leaving tips.

The audit revealed “a number of management decisions were not in the taxpayers’ best interest” and resulted in $549,399 of improper spending in the roughly two years that were examined.

That total adds to the increasing costs of mopping up the authority after Gov. Kim Reynolds fired Jamison from his $131,000-a-year-job on March 24 for sexually harassing employees.

The authority administers programs that assist people purchasing a home, issues financial assistance for affordable housing, allocates funding to create and preserve safe and affordable housing and helps communities obtain low-interest loans for water infrastructure.

Investigations ordered by the authority’s board of directors after Jamison’s ouster have cost $112,000 to document incidents of sexual harassment and make policy recommendations, and an estimated $95,000 to $110,000 invoice the authority expected for a financial review.

Moreover, the audit Friday questioned the wisdom of Jamison’s push to relocate authority offices to a rented facility instead of renovating and expanding its current space. The audit found that Jamison signed a lease for more space than needed. And after 10 years, the cost of renovating existing space is “comparative if not less than leasing.”

The terms of the lease “do not favor the state,” the report said.

State Auditor Mary Mosiman recused herself from the audit “because there may have been a perceived lack of independence,” according to the report. She is on the Iowa Executive Council that voted in favor of the now-questioned lease.

Deputy State Auditor Andrew Nielsen, who signed the audit, said Jamison created a culture that “illustrates a lack of concern for the use of taxpayer funds.”

More than $328,000 of the improper spending was for questionable payroll expenses, including “larger than typical pay increases.”

The previous investigation into the sexual harassment allegations found women targeted by Jamison had their pay increased dramatically, perhaps contributing to their fear of “adverse employment consequences” if they reported him.

The new report found one employee’s salary increased nearly 35 percent to more than $101,000 after one promotion. The audit said an increase of just about 4 percent would have placed the employee in the proper pay range.

The review found that six employees, most of team in Jamison’s executive team, “received significantly higher step increases or promotions” than did other authority or state employees.

Among other findings:

• $26,816.99 went for improper credit card purchases and travel expenses. These included hotel rates higher than state policy allows, unnecessary hotel accommodations, excess mileage reimbursement and alcohol purchases with meals, among others.

• $26,783.71 went to reimburse relocation expenses to one employee, but there was no independent documentation to support the cost.

• $195 went to registration for “Business Etiquette and Dining Tutorial.” Said the audit: “We were unable to determine how this class benefited IFA and how it benefited taxpayers.”

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• The report documented seven instances in which Jamison’s charges for lunch included alcohol purchases. While the costs were small, the report noted policy forbids consuming alcohol while conducting state business and driving state-owned cars.

“While IFA is established as an authority rather than a state agency and proceeds earned by IFA are not returned to the state’s general fund as is done with most executive branch agencies, the funds generated by IFA are still taxpayer funds and should be handled with the highest degree of fiduciary responsibility,” the audit said.

Erin Jordan of The Gazette contributed to this report.

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