State auditor stops by Charles City to chat about accountability, transparency

By Bob Steenson, bsteenson@charlescitypress.com

The Iowa state auditor caused come consternation late last year for public bodies and for private non-profit organizations that those bodies have routinely been giving money to, when he said such practices were illegal.

But Auditor Rob Sand, who stopped to chat with people in Charles City this week, said it’s always been against the Iowa Constitution for public bodies to “give” public money to private groups.

He said he’s not trying to stop city councils, boards of supervisors and other public entities from supporting worthwhile community groups and projects, but his goal is to get them to do it in a way that’s legal and that offers accountability and transparency.

Sand was in Charles City Wednesday for a town hall meeting that’s part of a “100 Town Tour.” While the stop was not billed as a campaign event, Democrat Sand is running for re-election in November, facing Republican challenger Todd Halbur of Clive.

Sand spoke to a handful of mostly other public officials, dealing with a couple of topics that focused on the theme of accountability and transparency.

His office had issued a “best practices” advisory to government bodies in the state on working with non-profit organizations in November 2021.

“Governments are prohibited from making direct donations and in-kind contributions to non-profits under Article III, Section 31 of the Iowa Constitution,” the advisory said.

Such actions have always been illegal, and Iowa attorney general opinions have consistently said so, so the Iowa Auditor’s Office wanted to provide direction and clarification, the advisory said.

There are two instances when it’s OK for a public body to give money to a private non-profit group – when the goal is economic development, and when the government body is contracting for services with the private group, the advisory said.

Sand said Wednesday that the danger of a public body making a “donation” to a private group or project is there’s no way to tell if the money is being used as the public body intended. If the body asks for proof as to how to how the money was used, or asks to look at the organization’s books, it can be met with hurt feelings and a reaction of, “What? Do you think I’m stealing?”

The better way to do things is with a contract that spells out the benefit that the public will receive in return for the money, and that lists what information the private group will be required to provide to show how the money was spent and what rights the public body will have to review documentation.

Roy Schwickerath, a Floyd County supervisor, said that any action the supervisors take to support a group is done in a public meeting.

For example, in years past the Floyd County Board of Supervisors has given money to the Floyd County Community Foundation, the county museum, Foster Grandparents, Healthy Harvest, a Rockford lighting project and many others.

“I’ve never run into a situation where I had a problem seeing what they were doing with it,” he said.

Sand said most groups don’t run into trouble, but some do. A contract or agreement lets both sides know what is expected.

“And once you have the first contract you have a template,” he said, adding that the process does not have to be complicated or difficult.

“Our job as auditor is to promote best practices to prevent bad things from happening,” he said.

Sand noted that his office does not have the power to enforce laws. It has the power to investigate, and to report. If wrongdoing is uncovered, it is up to the county attorney, the state attorney general or even federal authorities to step in to prosecute a case if warranted.

“The consequence of our report is transparency,” he said.

Sand said if he is re-elected one of his goals would be to start a pilot project to put public accounts online, so that people could have the ability to see what their city or county or school government is doing almost in real time with its receipts and payments.

He said there has never been a case of embezzlement without lack of supervision.

Increasing transparency is the best way to prevent improper financial acts, and technology is the best way to accomplish that, he said.