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Gov. Reynolds: Iowa to return $21M used on IT infrastructure to Coronavirus Relief Fund

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DES MOINES, Iowa (KTIV) - Gov. Kim Reynolds has directed the Department of Management to return $21 million to Iowa's Coronavirus Relief Fund.

According to a press release from the governor's office, the funds were initially allocated for payments related to the state's contract with Workday, a cloud-based human resources, finance and planning system. Officials say it was being implemented to modernize Iowa's IT infrastructure.

Of the $21 million allocated for the project, $4.45 million was spent.

“The COVID-19 pandemic only further highlighted the critical need for integrated IT systems that will improve operational efficiency and effectiveness for the State of Iowa,” said Gov. Reynolds. “Following multiple conversations with the Treasury Department last spring, we believed we had assurances that the upgrade to Workday qualified as an allowable expense. We would not have moved forward without those assurances.”   

Back in October, Iowa’s auditor warned that the governor’s decision to spend $21 million in federal pandemic relief funds on a new executive branch software system would not be allowed and should be abandoned. 

State Auditor Rob Sand said that using the federal money to pay for Workday was an inappropriate use under the law. In a letter sent to the director of the Iowa Department of Management, Sand advised that the millions of dollars used for the system was not allowed under CARES Act expenditure requirements.

Read More: Audit finds Gov. Reynolds’ use of $21M in CARES Act money ‘not allowable’

While the State still maintains its position that the Workday expenditures were allowed, officials say the funds will be returned by Dec. 18.

Iowa received a total allocation of $1.25 billion from the Coronavirus Relief Fund established by the federal Coronavirus Aid, Relief and Economic Security (CARES) Act. 

The $4.45 million spent on Workday represents just 0.36% of the total funds, while more than 96% has been allocated to programs that have provided direct relief for Iowans. 

  • More than $76M to support Iowa families   
  • More than $126M to support small businesses and non-profits  
  • More than $110M to support Iowa farmers and producers  
  • $125M to support Iowa communities  
  • Nearly $112M to support Iowa health care providers 
  • $490M for the Unemployment Trust Fund, creating tax relief for 40,766 employers    
  • $35M for Broadband Expansion Grants  
  • $127M for COVID-19 operations  

The State is expected to allocate the remaining $47.3 million by the Dec. 30 deadline.

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Dean Welte

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