The Iowa Judicial Branch has improperly distributed more than $53 million of collected court debts since 2021 because of an IT error, according to letters from the Speaker of the Iowa House and the director of the Iowa Department of Management.
House Speaker Pat Grassley and Iowa Department of Management Director Kraig Paulsen, both Republicans, wrote to Democratic State Auditor Rob Sand, urging him to investigate the judicial branch’s court debt collections and questioning why he hasn’t already done so.
According to Paulsen’s letter, the improper distributions meant the state’s Victim Compensation Fund was shorted $3.7 million, the Juvenile Detention Home Fund was shorted $3.5 million, the DARE program was shorted $154,000, and the Road Use Tax Fund was shorted $10 million.
Paulsen’s letter noted the total misallocation amount is based on improper overpayments of $26.6 million plus funds that remain underpaid by $26.6 million. It was not clear from the letters what that $26.6 million was used for if it didn’t go to the proper funds.
A judicial branch employee said Tuesday that their communications director is out of town and that they would respond to IPR “as soon as possible.”
Sand said Tuesday that the money has not left the state’s accounts.
Court Administrator Bob Gast said the judicial branch does not have a plan to correct the issue, according to Paulsen’s letter.
After the Iowa Legislature made changes in 2020 and 2021 to how judicial fees and fines should be distributed to government programs, the judicial branch programmed the changes into its IT system.
Grassley and Paulsen said they recently learned from court administrators that in late 2021, the judicial branch discovered computer programming errors were causing some of the money to not be distributed correctly.
Grassley wrote that the judicial branch’s attempts to fix it “led to additional issues,” and the courts tried to get help from an outside vendor but never notified him of the problem.
The Iowa Department of Transportation in 2022 told the judicial branch about financial irregularities in the collection and distribution of money paid for traffic tickets, according to Paulsen’s letter, and the judicial branch then got services from the National Center for State Courts to review its debt collection practices.
In a letter to the DOT in September 2022, Gast said, “We have initiated a comprehensive review of court debt distribution policies, programming and practices. We are committed to ensuring that we distribute court debt accurately and promptly as required by law.”
According to emails shared by Paulsen, the DOT also notified the state auditor’s office in October 2022 about problems with the distribution of traffic ticket collections.
Paulsen said it appeared Sand’s staff did not follow up, and that audit reports on the judicial branch for the 2021 and 2022 fiscal years did not mention problems with court debt collection.
“It is unclear why the internal controls for the Judicial Branch have not been tested and these issues resolved,” Paulsen wrote.
He said the executive branch wasn’t notified or asked to help correct “this pervasive and widespread misallocation of funds.” According to emails attached to Paulsen’s letter, the DOT was consulting with the DOM in 2022 about the financial irregularities.
“The Reynolds administration knew of this issue since it began and everyone knew the Judicial Branch hired a specialist for an in-depth review,” Sand said in a statement Tuesday. “Furthermore, the auditor’s office is the only one of the entities involved that can’t actually fix the problem.
Grassley wrote to Sand asking him why his office took no action since being made aware of the court debt collection issues two years ago.
“When you are made aware of misallocated funds by a branch of government, it is your duty to Iowans to investigate, alert the public, and seek to rectify the issue,” Grassley said. “Your inaction in this case is baffling and inexcusable. If there is any other explanation why it appears that the taxpayer’s watchdog was sleeping on the job, I would be very interested to hear it.”
Sand called these statements “partisan bluster.”
“Don’t forget: Speaker Grassley advanced and Gov. Reynolds signed a law last year gutting our ability to audit many areas, including IT-related issues like this,” he said.
The law limiting the state auditor’s power took effect in July 2023.
