Iowa State Auditor Rob Sand accused Iowa Gov. Kim Reynolds’ administration of withholding documents needed to prove the state has proper financial controls and protections in place to prevent waste, fraud, and abuse of taxpayer dollars for the state’s Education Savings Accounts.
In the annual Statement of Auditing Standards, where the auditor’s office details current deficiencies in the state’s financial reporting and controls, the auditor’s office found three “material weaknesses” in financial reporting controls related to the Education Savings Accounts.
State officials said the information Sand and his office sought was outside the scope of the audit and requested that a separate letter of engagement be made to audit the program.
The material weaknesses come from what Sand alleges is a refusal to provide the proper documents to the auditor’s office to detail the financial controls in place for the program that cost the state over $129 million in fiscal 2024.
The program provides reimbursement to parents and guardians of students who attend an accredited private school in the state for “qualified education expenses” and first must be spent on tuition before covering other expenses.
The report issued by Sand’s office on Tuesday said due to the state’s failure to turn over the documents required to prove proper financial controls exist, they are unable to determine if the Department of Education is properly dispersing taxpayers dollars through the program.
“The bottom line is this — this administration won’t let us audit the controls on $100 million in your tax money going out on the vouchers program,” Sand said in a news conference Tuesday. “That program is likely to grow to over $300 million next year, and we cannot say that it has appropriate and reasonable controls for waste, fraud, and abuse.”
Reynolds accused Sand of being biased toward the program during an unrelated news conference on Tuesday and that he is using the program as a political prop for a run for higher office.
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“First of all, let me just say that Auditor Sand has been gunning for higher office since the day that he was elected,” Reynolds said on Tuesday. “The auditor should be non-partisan, not biased, but he has publicly been against education freedom and ESAs since the day that we signed it into law.”
The fight over the program comes as Sand is widely considered to be the top contender to challenge Reynolds for her seat in 2026, though neither Sand nor Reynolds have announced their intentions to run for the office yet.
The tussle comes from the state’s insurance on a new engagement letter to audit the state-run program that would allow for guardrails on the audit, but Sand rejected the notion and pointed to a 2023 Iowa Supreme Court decision that said the auditor’s office does not need an engagement letter to begin an audit.
The report issued by Sand Tuesday said three of the state’s main issues in internal financial controls, of the 14 listed in the report, are due to the state’s failure to turn over reports detailing the proper controls for the Education Savings Account program.
The Iowa Department of Education and the Iowa Department of Revenue released a joint statement Tuesday following Sand’s news conference rebutting the idea the programs are without guardrails.
“The Iowa Department of Education, the Iowa Department of Revenue, and all other state agencies make responsible stewardship of taxpayer funds their top priority,” the statement read. “It is unfortunate that the Iowa State Auditor has wasted time and taxpayer money in an effort to target a program that is helping Iowa families exercise their statutory right to school choice.”