State Auditor Rob Sand says the Iowa Department of Education denied him access to information about the state’s education savings accounts, the program championed by Republican Gov. Kim Reynolds that allows families to use state funding to pay for private school tuition.
Sand, a Democrat, said the Reynolds administration’s refusal to provide the information means his office could not determine if proper financial controls are in place to prevent waste, fraud and abuse.
“The mission of this office is to shine a light on how the state spends your money, hold government agencies and lawmakers accountable, and help prevent waste, fraud and abuse,” he said at a news conference Tuesday. “We can’t do that when the governor gives her approval to hiding documents and thumbing their nose at transparency.”
Reynolds said Sand did not follow the right process for seeking information about the ESA program. She accused him of using his office for political gain.
“The mission of this office is to shine a light on how the state spends your money, hold government agencies and lawmakers accountable, and help prevent waste, fraud and abuse."State Auditor Rob Sand
“The Department of Education has made it very clear that the program is doing what it’s supposed to be doing,” Reynolds said at her own news conference. “The controls are in place. But if he wants to verify that, then he needs to submit an engagement letter and a scope of work, and then we’ll get him the information that he’s looking for.”
The auditor’s office sought the information as part of the state’s annual comprehensive financial report (ACFR). Based on that, it released a required report on the state’s internal controls Tuesday that included six “material weaknesses,” three of which are related to the ESA program.
Sand said the Reynolds administration did not provide documentation that students receiving ESAs met income eligibility requirements, or proof that the $104 million spent on the program in the last fiscal year was adequately checked for waste and fraud. He said the education department also refused to provide a report from the third-party vendor that administers ESAs that would show how the company is protecting Iowans’ personal data.
He said the state’s three other material weaknesses are related to unemployment benefits, and the state had reasonable responses to those issues along with plans to fix them.
Governor and auditor disagree on auditing methods
Reynolds and Sand disagree on whether the auditor’s office can request detailed information about ESAs through the annual financial audit. Reynolds said Sand must provide a formal engagement letter to start a separate audit.
“He doesn’t really want the answer,” she said. “He wants the political fodder back and forth to really boost his political career.”
Sand said because the ESA program is new and spends a significant amount of money, his office is obligated to examine it as part of the annual financial audit. He said a separate engagement letter wouldn’t follow auditing standards.
“This isn’t just me standing here,” Sand said. “This is our office’s [certified public accountants], who have served under four state auditors. We can say that this report comes from the same mission of nonpartisan accountability as our work has for decades.”
He also pointed to a previous Iowa Supreme Court opinion that said the auditor is not necessarily required to provide a formal engagement letter to begin an audit.
In response to the auditor’s report, the Iowa Department of Management called Sand’s request for ESA information through the annual audit “unheard of.”
Reynolds said Sand is “obsessed” with the ESA program and wants to take it down.
Sand said the state’s refusal to provide documents was unprecedented.
“You want to look more closely at new programs to make sure that, as they are getting set up, that everything is functioning as it’s supposed to,” he said. “And so what I can say is, that never in the past have we been denied the capacity to do this.”
Reynolds said Sand is “obsessed” with the ESA program and wants to take it down.
“The auditor should be nonpartisan, nonbiased, but he has publicly been against education freedom and ESAs since the day that we signed it into law,” she said.
The Iowa DOM response to the auditor’s report included a list of negative social media posts Sand made about ESAs, which DOM said points to Sand’s lack of impartiality regarding the program.
Sand said anybody in his role should talk about a program that does not include audits of how private schools spend the money they receive through ESAs.
“That should be alarming to anybody who cares about how tax money is spent, and I’m not going to be quiet about those wide open lanes for waste, fraud and abuse,” he said.
Sand said a law passed in 2023 that removed his ability to go to court to seek state documents made state officials feel like they could hide information from the auditor’s office. The law instead set up an arbitration process for dealing with these kinds of disagreements, but Sand said he will not pursue that route because two of the three people on the arbitration panel work for the governor.
