DES MOINES, Iowa — State Auditor Rob Sand is calling out Iowa GOP lawmakers over a proposed bill he said would undermine his office’s ability to provide independent audits and allow entities to keep documents hidden that could reveal corruption and fraud.

Sand also said SF 478 would put Iowa at risk of losing hundreds of millions of dollars in federal funding because it conflicts with auditing standards.

The bill was introduced in the Republican-controlled Iowa Senate Tuesday and was passed the same day on a party-line vote of 33-16. Part of the legislation says:

“Any litigation between constitutional and statutory offices, administrative departments, commissions or boards of the executive branch of state government is prohibited. All disputes between said governmental offices and agencies shall be submitted to a board of arbitration of three members to be composed of two members to be appointed by the offices or departments involved in the dispute and a third member to be appointed by the governor. The decision of the board shall be final.”

Senate File 478

After learning of the legislation, Sand’s office gathered national opposition to the bill.

“This guts independent oversight of government which could cost the state at least hundreds of millions of dollars in federal aid annually for Medicaid, Veterans’ Affairs, road construction, student loans, community colleges and the like, as well as encouraging corruption, waste, fraud, and abuse. But don’t take my word for it: a bipartisan coalition of watchdogs from around the country agree.”

State Auditor Rob Sand

Former U.S. Comptroller General David Walker, who was appointed by Ronald Reagan and served both Republican and Democrat presidents, is urging Iowa lawmakers to stop the advancement of the bill. In a letter, he mentioned the federal funding Iowa could be putting in jeopardy related to education funding, student loans, and medical assistance if the legislation passes.

Sand also highlighted a letter in opposition to the bill from the President of the National State Auditors Association, Connecticut State Auditor John C. Geragosian, on behalf of 26 other state auditors.

The letter stated, “If the auditor cannot obtain sufficient, appropriate evidence due to externally imposed limitations such as those outlined in this bill, they may disclaim an opinion on the state’s financial statements and its compliance with the laws and regulations of major federal grant programs. This means that these limitations are so severe that the auditor is unable to issue an opinion. This should not be the desired outcome of any audit and would lead to significant concerns for the federal grant-awarding agencies and could result in a loss of federal funds. A disclaimer on the financial statements could also negatively impact the state’s bond rating.”

WHO 13 reached out to the office of Senate Majority Leader Jack Whitver (R) for a response to Sand’s concerns over SF 478.

“SF 478 protects Iowans’ most private and confidential information, clarifying audit standards for the auditor, and allowing for access to information relevant to an audit. It protects confidential personal information like health records, tax records, and academic records of Iowans from needless intrusion by the state auditor.”

Sen. Jack Whitver (R)

The proposed bill has now moved on to the Iowa House.