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Gov. Kim Reynolds responds to audit alleging misuse of CARES Act funding

The state auditor released a report Monday alleging the Reynolds administration improperly used $21 million of federal funding designated for coronavirus relief.

WEST DES MOINES, Iowa — Gov. Kim Reynolds said her administration is reaching out to the Office of the Inspector General to review the state's decision to use CARES Act funding for IT upgrades.

The move comes after the state auditor said her administration spent coronavirus relief funding on non-pandemic related costs. 

"We do believe it's an allowable expense," Reynolds said Wednesday. "Almost every single governor across this country has actually asked their congressional delegation, as well as the administration, to give more flexibility with the dollars, and that's across the board."

Monday, State Auditor Rob Sand released a report alleging the Reynolds' administration improperly used federal funding designated for coronavirus relief.

According to the audit, the administration used $21 million to pay for an Human Resources/accounting computer system called Workday. The program is intended to replace the state’s legacy mainframe system. 

RELATED: Gov. Reynolds' use of CARES Act money for non-pandemic expenses 'not allowable', State Auditor says

Sand, a Democrat, said the use of CARES Act funds for that expense is inappropriate because the contract to switch systems was signed in 2019, prior to the start of the coronavirus pandemic. 

Sand, who has been critical of how the Republican governor has handled the COVID-19 pandemic, also claimed the administration's decision to use almost $500,000 of coronavirus relief for staff salaries was questionable.

"Based on our review, we determined that the contract with Workday is not an allowable expenditure as it does not meet the CARES Act criteria ", U.S. Department of the Treasury Deputy Inspector General Richard K. Delmar wrote in a letter dated Oct. 16.

If the state hears back from the OIG and finds out the Workday expenses aren't allowable, Reynolds' said they'll adjust accordingly. 

"We're going to reach out and talk about why we believe it was an appropriate expense and hopefully, we'll get the answer that we think we should get," Reynolds said. "If not, then we'll readjust and do what we need to do. We would never, you know, we're not going to spend dollars in a manner that's not appropriate. So we'll talk to OIG, see what they say, and if not, then we'll figure out what next steps are."

Click/tap here to read the full audit.

RELATED: State Auditor asks IDPH for Iowans' private medical records

RELATED: COVID-19 in Iowa: State reports 28 deaths in 24 hours; hospitalizations set another record with 534