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DES MOINES, Iowa—Iowa State Auditor Rob Sand released a report on April 29, 2025, alleging that the Iowa Department of Management (DOM) and other executive agencies obstructed legally mandated audits and withheld key records from a state legislator. The report was prepared in response to a legislative request under Iowa Code §11.5C, after Rep. Elizabeth Wilson Levin requested records of communications between the Auditor's Office, the Governor's Office, the Department of Education, and DOM. It centers on oversight of the state's Education Savings Account (ESA) program and broader conflicts over access to information. According to the report, "at least twelve documents were not provided," including internal communications that show DOM officials considered limiting the Auditor's oversight and proposed "alternative approaches" to meeting audit requirements. One such withheld document was a June 12, 2024 memo from DOM Director Kraig Paulsen declaring that he was "rescinding consent" to the state's annual audit—a step Sand's office said has "no basis in law." "These violations or attempted violations of Iowa law and auditing rules were withheld from the legislator," the Auditor's report states. In response, the Department of Management defended its handling of the records request and challenged the report's characterization in a statement: "The Department of Management (DOM) received a broad multi-part record request from Representative Levin in February. The request appeared to be focused on the Education Savings Account program and the audit of that program. The initial search yielded more than 10,000 potentially responsive documents, which would have taken many months to review. Because of the apparent specific focus on the ESA program, our search terms reflected that. It appears that this handful of documents produced by the auditor were likely not located as they did not relate specifically to the ESA program. In any event, after our production, DOM met with Representative Levin and told her to let us know if we misunderstood the request – which was entirely possible given the broad request – to just let us know. DOM also told her that if she wanted to give us search terms to use, instead of us guessing, then to provide those. She never did. DOM also told her that we would be willing to run a new search with any search terms that she wanted, but she did not ask." The report further details how DOM delayed or obstructed audit work by insisting that new "engagement letters" be signed for each audit. According to the Auditor's Office, this practice is neither legally required nor supported by professional standards. "This proposed requirement has not been practiced by the state previously, nor is it required or recommended by Government Auditing Standards," the report notes. Emails between the Auditor's Office and DOM show that Deputy Auditor Ernest Ruben warned repeatedly about the consequences of these delays. On January 25, 2024, Ruben wrote: "DOM's ongoing delay in returning a signed engagement letter is actively creating an audit issue," adding that it put the federal Single Audit—and Iowa's access to federal funds—at risk. The dispute escalated in June 2024 when DOM attempted to insert new legal language into the Auditor's engagement letter without the Auditor's knowledge, and issued a memo instructing agencies not to cooperate unless separate letters were signed. On June 17, Auditor Sand issued a memo stating DOM's directives violated Iowa Code Chapter 11. Two days later, DOM reversed its position and signed a standard engagement letter. That agreement was also not included in DOM's original production of records. The Auditor's report concludes that DOM's actions hindered oversight and transparency. It states: "The costs to the public of delay, error, or failure to detect waste, fraud, and abuse from these actions are real." The full report is available at: https://www.auditor.iowa.gov/reports/audit-reports/?CategoryID=10

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Iowa Auditor Accuses State Agencies of Audit Obstruction; Department of Management Responds