Republican Gov. Kim Reynolds signed a bill into law that restricts the Iowa state auditors’ access to certain types of information. Critics of the law say it will hinder the ability of state auditors to investigate wrongdoing and fraud at state agencies.
The law prohibits the state auditor from taking state agencies and officials to court if they refuse to provide records during an investigation. It also bars the auditor from accessing certain private information, including medical and student records, unless it’s needed to comply with other state or federal regulations.
Auditor Rob Sand, the only Democrat statewide elected official, called it “the worst pro-corruption bill in Iowa history” and said the law will allow state agencies being investigated for waste, fraud, and abuse of taxpayer funds to hide information if the governor agrees to it. It passed largely along party lines with no Democrats voting for the bill.
“It will allow insiders to play fast and loose with Iowans’ tax dollars because those very same people will be able to deny the Auditor’s Office access to the records necessary to expose them,” Sand said in a statement. “As Assistant Attorney General, I prosecuted criminal cases for seven years. This is akin to letting the defendant decide what evidence the judge and jury are allowed to see.”
Opposition from the IIA
The Institute of Internal Auditors spoke up to oppose the legislation. The law “fundamentally restricts the independence of the audit process and denies Iowa taxpayers’ appropriate transparency on the actions of state government,” IIA CEO Anthony Pugliese wrote in an open letter to Iowa officials. “The Auditor of State should not, unless otherwise prohibited by law, require permission of the auditee to disclose ‘instances of embezzlement, theft, or other significant financial irregularit[ies].’ Such a concept not only violates the purpose of an audit but may indirectly promote unethical behavior because an agency can withhold consent from publicizing any identified wrongdoing.”
The law will go into effect on July 1.
Joseph McCafferty is editor & publisher of Internal Audit 360°