Iowa Cannot Spend $ 20 Million in Coronavirus Aid on Computer System, Regulators Say


State auditor and federal inspectors have determined that Governor Kim Reynolds’ decision to use $ 20 million in coronavirus relief money on a new computer system was “ineligible” and could result in the loss of the money by Iowa if it is not transferred by the end of the year.

“If the governor does not redeploy these dollars for lawful use, they will have to be returned to the federal government,” State Auditor Rob Sand wrote in an Oct. 16 letter to Dave Roederer of the Department of Management. “This will result in a loss of $ 21 million to the taxpayers of Iowa.”

In July, Reynolds announced that she had transferred $ 91 million of Iowa’s $ 1.25 billion from the Coronavirus Aid, Relief and Economic Security, or CARES Act, to the Chief Information Officer ‘s office for technological upgrades.

This included $ 20.1 million to replace the state’s budget, accounting and human resources computer system with a cloud computing system by Workday, The Gazette reported in August.

Reynolds spokesman Pat Garrett told The Gazette in August that the Workday system will play an “integral role” in the response to COVID-19 by giving government employees flexibility and helping them with budgeting and remote work. The system was to be implemented from 2021.

Richard Delmar, Deputy Inspector General of US Department of the Treasury, also wrote a letter to Roederer on October 16, echoing Sand’s findings.

“Although the new and modern Workday system may provide additional functionality, these upgrades are not necessary to address the public health emergency and were already planned before the outbreak of the COVID-19 pandemic,” said writes Delmar. “As such, funding the Workday contract with proceeds from the Coronavirus Relief Fund is unreasonable,

authorized use of funds.

He asked Roederer to respond by October 26 with the Iowa Corrective Action Plan to return that money to the Iowa Coronavirus Relief Fund.

The state signed contracts in October and February to pay Workday $ 50 million over five years for the new system, skipping traditional tendering procedures and choosing a company whose lobbyist, Jake Ketzner, was the Reynolds’ former chief of staff, The Gazette reported in February.

When The Gazette detailed the state’s unusual route to contract with Workday, the governor’s office said Ketzner was not involved.

Reynolds had originally planned to fund the annual payment to Workday with money from the Rebuild Iowa Infrastructure Fund, Sen. Joe Bolkcom, a senior Democrat on the Iowa Senate Credit Committee, told The Gazette in August.

But because that fund is being fueled by gaming revenues from state-licensed Iowa casinos, which were closed for 11 weeks due to COVID-19, there was not enough money for spending. from Workday.

The Workday system was not to be implemented until July 2021 and July 2022.

CARES law funds are supposed to be used to “cover costs which are necessary expenses incurred due to the COVID-19 public health emergency that were not previously reflected in the most recently approved budget in date March 27, ”the non-partisan legislative services agency. reported in August.

Senator Claire Celsi, D-Des Moines, said in a statement Monday that she was disappointed that Iowa did not follow the rules of the CARES Act.

“Instead of spending more money on testing and contact tracing, paid sick leave for essential workers, food aid, childcare subsidies, extra money for rent assistance , unemployment insurance, helping public services, providing PPE for healthcare workers and educators, and helping schools prepare for the winter season – and a myriad of other uses – the Governor Reynolds is using the CARES Act money as a way to fund pet projects and to show the Iowa budget with surplus funds, ”Celsi said.

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Iowa Governor Kim Reynolds arrives to update the state’s response to the coronavirus outbreak at a press conference, Tuesday, July 7, 2020, in Urbandale, Iowa. (AP Photo / Charlie Neibergall)


Gordon K. Morehouse