Republicans on the House Government Oversight Committee are calling for an independent audit of the state court system’s misallocation of about $25 million.
That’s just one of the recommendations the committee is making in response to computer programming errors that sent court debt collections to the wrong state fund over four years, causing shortfalls in other state and local funds.
The Republican-led oversight committee approved a report Tuesday slamming the Iowa Judicial Branch for “concealing” the problem and State Auditor Rob Sand for not quickly investigating the issue.
Rep. Charley Thomson, R-Charles City, chairs the committee and wrote the report after questioning judicial branch officials and Sand at hearings last year. He said this is not just a story about a computer glitch.
“When the judicial branch discovered a massive problem with public funds, they made a choice,” Thomson said. “They chose silence over transparency. They chose consultants who couldn’t audit over auditors who could. They chose three years of quiet fumbling over one honest phone call to this legislature.”
Thomson said he wants the state to hire a private accounting firm to conduct a forensic audit of court debt collections. The committee is also recommending the state outsource distribution of court debt to a private company, because the judicial branch “has demonstrated it cannot manage public funds with even basic competence.”
Steve Davis, communications director for the Iowa Judicial Branch, said the judicial branch “takes full responsibility for the misallocation” and is committed to working with the other two branches of government to resolve the issue and improve court debt distribution.
“While we have not had an opportunity to fully review the report and comment on the recommendations, we appreciate that the report acknowledged there was no criminal intent or personal enrichment,” he said.
Thomson accused the state auditor’s office of a “stunning abdication of oversight responsibility” after it was notified of potential financial irregularities in 2022.
Sand, a Democrat who is running for governor, said no money was lost and no services were delayed.
“This is like the bank putting money meant for your checking account into your savings account. That is what the judiciary did,” he said in a statement. “The judicial branch has taken full responsibility for its error. This report rehashes old, debunked lies in an election year and is the same politics that Iowans hate.”
Sand has said his office would not have the ability to detect computer coding problems, and he worked with the judicial branch on a plan to hire computer coding experts to address the issue.
Thomson criticized Sand for issuing audit reports in September 2024 for three prior fiscal years that did not mention the court debt misallocations. The judicial branch notified the legislature of the court debt problem later that month.
In December 2024, Sand released an audit that said the judicial branch sent $27.6 million to the wrong state fund. He said because his office learned of the problem in fiscal year 2023, the information was included in that report, and not prior reports.
Republicans on the House Government Oversight Committee are also recommending passing a bill to require immediate notification to the state auditor, governor and legislature when a state agency discovers misallocations of more than $100,000. The report says lawmakers should ensure the judicial branch has enough time to implement future changes to court debt distributions. Legislation enacted in 2020 and 2021 required the judicial branch to quickly overhaul its court debt distribution system, leading to computer errors.
The committee is also calling on the judicial branch to provide documentation tracing all misallocated funds, along with a detailed plan for how the funds will be recovered and sent to intended recipients.
Thomson said he still has not seen evidence that all of the $25 million stayed in the state’s accounts.
“I have no reason to think that there’s a particular malicious person who stole the money,” he said. “But until we have traceability on the funds, I’m concerned about it. We’re going to keep chasing it.”
Democrats issue their own report
Democrats on the House Government Oversight Committee released their own report on Wednesday, blaming Republican state officials for “failing to do a proper and full investigation.”
Rep. Larry McBurney, D-Urbandale, the top Democrat on the committee, said Republican lawmakers and leaders have engaged in “political theater” and “have repeatedly chosen to assign blame to political opponents rather than conduct a thorough, nonpartisan review focused on solutions and transparency.”
“We must be clear that this misallocation does need a disciplined, proportional, and comprehensive legislative oversight review,” he said. “Errors within the judicial branch and the executive branch, both currently led by Republican appointees, are significant and warrant serious scrutiny.”
The Democrats’ report criticized the Republicans’ report for comparing court debt misallocation to major multinational fraud schemes, and for implying that vulnerable Iowans suffered irreparable harm. The Democrats’ report says they have not seen evidence that any services were denied.
The report says standard financial audits reconcile balances and verify transactions and are not designed to “reverse-engineer statutory coding formulas.”
“That reflects a verification gap within system architecture instead of gross negligence by the auditor’s office,” the report states.
Democrats agreed with many of the Republicans’ recommendations, but said they fell short by failing to provide a roadmap for implementation. The report recommends using the court technology and modernization fund to start implementing corrective measures.
