More questions are being raised about the spending and accounting practices of the Iowa Finance Authority following the firing of director Dave Jamison last month.
Now, former Finance Authority employee Deb Flannery says Jamison fired her for no documented reason in 2016 once she raised concerns about a lack of internal financial controls and failure to have proper budget oversight.
Flannery alleges that:
- A Finance Authority employee’s personal Paypal account was used to collect thousands of dollars in agency fees over several years.
- Budget authority given to Jamison by the IFA board was interpreted so broadly that multiple employees were allowed to spend tens of thousands of dollars on the organization’s behalf without board approval.
Carolann Jensen, IFA’s interim director, said Friday she was not aware of the Paypal allegation but acknowledged the unapproved spending issue.
The Finance Authority allowed Jamison to spend as much as $100,000 each year that was not in the budget, she said. Jamison, in turn, allowed each member of his leadership team — four employees — to individually spend as much as $10,000 of that amount, Jensen said.
The money was intended to pay for unexpected expenses such as education necessary to help train staff or clients about new procedures or technologies that weren’t anticipated in the group’s annual budget.
Jensen said she wasn’t aware of abuses but acknowledged the money could have been used for questionable purposes — such as entertaining clients.
“I supposed anybody could have spent it on anything if nobody is watching, but I’ve not found any evidence that any of us have utilized the unbudgeted $10,000 in an inappropriate way,” Jensen said.
Jensen added, however, that the practice is under review.
“I don’t believe I have many concerns about that, but that is one area we were going to re-evaluate just because of the perception and with everything occurring — we’re trying to lead to more transparency.”
The Finance Authority was created more than 40 years ago to assist efforts to expand housing for low- and moderate-income families.
Today it has a nearly $68 million budget, almost all of which comes from federal allocations or payments from its investments.
Unlike many government agencies, it is set up as an authority, meaning its board has fewer restrictions than other state agencies.
Jensen said she believes the authority’s structure has served it well. However, the $100,000 unbudgeted spending allowance of the Finance Authority’s director is being reassessed, she said.
“I have not changed any of the delegations yet,” Jensen said. “I’m the little duck on the pond, and I’m paddling real hard to try to keep things moving.”
On Friday, Gov. Kim Reynolds ordered an independent review in the wake of the sexual harassment allegations that prompted her to abruptly fire Jamison.
Whether the fiscal and accounting issues will be part of that investigation isn’t clear.
Reynolds ordered that the review be handled by Mark Weinhardt, a Des Moines attorney who spearheaded a 2013 report that found former Sen. Kent Sorenson broke ethics rules by accepting payments from presidential candidate Michele Bachmann.
“I cannot comment on the nature, progress or scope of an investigation that has not commenced,” Weinhardt said Friday.
Reynolds’ press release said Weinhardt will review “Jamison’s firing and any similar incidents or conduct during his tenure as executive director.”
On Feb. 12, the Iowa Executive Council approved a $17 million move of the Finance Authority’s administrative offices in a state-owned building at 2015 Grand Ave., to a leased space at 1963 Bell Ave.
Public documents released last week and interviews with State Treasurer Michael Fitzgerald — the lone Democrat on the five-member executive council — indicate the decision was made without board members being informed about a third-party recommendation that the agency renovate its current location and remain there.
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