Auditor details mismanagement by Matt Schultz and Mary Mosiman

If you thought nothing could surprise you anymore about Iowa Secretary of State Matt Schultz, I recommend reading the report Chief Deputy State Auditor Warren Jenkins released yesterday. Jenkins reviewed payments to Schultz’s former chief deputy Jim Gibbons after Gibbons stopped coming to work. You can download a pdf of the audit here. I’ve posted the full text after the jump.

Key points: Schultz told Gibbons in May 2012 that his position would be eliminated at the end of the calendar year. Gibbons stopped coming in to work regularly the following month. Normal procedure calls for at-will state employees to be paid “until the end of the pay period, up to a maximum of 2 weeks after being notified their position is to be eliminated.” After learning that state agencies are not allowed to make severance payments to at-will employees, Schultz decided to keep Gibbons on the payroll through December 2012. There are no timesheets or records of how often Gibbons came to work between June and December of that year. Former colleagues could not provide Jenkins with much information about anything Gibbons did for the Secretary of State’s Office. Gibbons reported directly to Schultz.

The audit concluded, “Based on the lack of documentation supporting work performed by Mr. Gibbons, we cannot determine the public benefit of the Secretary of State’s Office paying Mr. Gibbons $90,738.67 in salary, vacation, and benefits for the period June 8, 2012 through December 31, 2012.” Jenkins also questioned the public benefit of paying more than $21,000 to two other at-will employees whose positions were eliminated.

Schultz is now running for Madison County attorney. That election will be a good test of whether Madison County Republicans care more about partisan allegiance or basic competence. A statement from Schultz tried to pass off Gibbons’ work arrangement as something advised by the Department of Administrative Services. That spin is misleading, for reasons I explain after the jump.

Current State Auditor Mary Mosiman was one of Schultz’s deputies during the period examined, and to put it mildly, this report casts an unflattering light on her. She has claimed that she warned Schultz that keeping Gibbons on the payroll was damaging to morale in the agency. But the bottom line is, she never blew the whistle on a colleague getting tens of thousands of taxpayer dollars for doing no work.

In addition, Jenkins found that neither Mosiman nor Gibbons submitted timesheets or “leave slips” documenting approval of planned time off. As a result, Mosiman “was paid for one week of accumulated vacation she should not have received” when she left the Secretary of State’s Office for her current job. She has reportedly already returned to the state her excess payment of $2,500. No one knows whether that’s the full extent of overpayments to Schultz’s subordinates. Jenkins’ report states, “Because timesheets and leave slips were not required to be completed and were not submitted by the Deputies, we are unable to identify any additional vacation hours used but not properly recorded for the Deputies.”

The state auditor is supposed to make sure the public’s money is well spent. How can someone do that job without understanding the need to record essential information such as time spent working and time spent on vacation? Even if Mosiman was not aware that she received too much vacation pay, she should have recognized and taken steps to correct the lack of record-keeping at the Secretary of State’s Office. She should not have stood by and let Gibbons collect month after month of salary and benefits, long after he stopped coming to work.

After the jump I’ve posted comments from Schultz, Democratic State Senator Liz Mathis (who requested the audit), Democratic candidate for secretary of state Brad Anderson, and Democratic candidate for state auditor Jon Neiderbach.

Statement Iowa Secretary of State Matt Schultz e-mailed to Radio Iowa on September 25:

“There is nothing new here. What I have consistently maintained is that I acted on the advice of DAS, which was shown by the State Auditor’s office. The restructuring of the office saved the taxpayers over a quarter of a million dollars and those savings can continue in the future.”

Nice try. The penultimate page of the report enclosed below shows an e-mail from Steven Ainger of the Department of Administrative Services, explaining that management cannot pay severance but can “send someone home” while keeping an employee on the payroll. However, that e-mail does not advise or recommend taking that approach with Gibbons. Ainger told Deputy Chief State Auditor Jenkins that “had he been provided specific details regarding the elimination of Mr.Gibbons position, he would not have recommended a three month period and particularly not six months.”

Statement from Democratic State Senator Liz Mathis (emphasis in original):

Audit: $113,000 of taxpayers’ money wasted on no-show employees in Secretary of State Schultz’s office

A Statement from Sen. Liz Mathis,

co-chair of the Administration and Regulation Budget Subcommittee

“During the 2014 session, it took repeated phone calls and emails by legislators to get Secretary of State Matt Schultz to answer basic questions about how he was spending taxpayer dollars. Now we know why he was not eager to answer questions about his potential misuse of public funds.

“An audit released today confirmed that Schultz handed out a six-figure salary to an employee who simply wasn’t working.  This is a disgraceful example of favoritism and a misuse of the powers of the office of Secretary of State. It also proves again that Schultz is a poor manager who lacked the experience to oversee the Secretary of State’s office in a responsible way.

“Last December, the State Auditor raised serious questions about whether Schultz had misused more than $240,000 of federal funds on fruitless criminal investigations of Iowa voters. The audit released today shows Schultz misspent another $113,000 of taxpayer funds. And this may not be the last we hear about Schultz’s misuse and mismanagement.

“Today, I renew my call for Secretary Schultz to apologize to Iowa taxpayers for this misuse of public money.”

Statement released by Brad Anderson, Democratic nominee for secretary of state:

“The Auditor’s report released today detailing the incredible mismanagement of the Secretary of State’s office under Secretary Matt Schultz is troubling and should concern all Iowa taxpayers. Iowa taxpayers deserve a Secretary of State who will do the job of Secretary of State rather than chase headlines and keep political cronies on the payroll without requiring them to show up for work. Iowans value work and have no tolerance no-show political appointees, especially at a time when our local election officials face tight budgets and struggle to pay for updated voting equipment.

“While my opponent in the Secretary of State’s race says he wants to ‘continue Secretary Schultz’s good stewardship of the office,’ I believe the time has come for new, fiscally responsible leadership in the office. I urge all the candidates in the Secretary of State’s race to join me and call on the no-show employees identified in the audit to either immediately document their work or return the salary they were paid to the general fund.”

Press release from Jon Neiderbach’s campaign for state auditor, September 25:

Iowa State Auditor candidate Jon Neiderbach released the following statement on recent developments with State Auditor Mary Mosiman’s time as Deputy Director in the Secretary of State’s office:

“The audit released today makes it clear that the current auditor doesn’t understand government principles that hold its employees accountable.  Basic personnel procedures require that all employees fill out timesheets and vacation leave requests precisely so these problems don’t occur.  Not only did political cronies get paid for time for which there’s no record they worked, Auditor Mosiman herself accepted taxpayer money later found to be an over-payment that she had to return.  It’s alarming that any leader in state government – let alone the current State Auditor – would do such a thing and benefit from vacation over-payment at the expense of Iowans.”

“Ms. Mosiman’s failure to notice that her own vacation hour pay-out didn’t accurately reflect her actual earned vacation total – coupled with her failure to blow the whistle on special treatment for political cronies, and her reluctance to audit the Secretary of State’s office once she became State Auditor – raises serious concerns about her competency as an auditor.  We now know that she personally benefited from her own bad management while at the Secretary of State’s Office.  Iowa taxpayers deserve better,” stated Neiderbach.


About Jon Neiderbach:  Jon Neiderbach spent 14 years performing fiscal and policy analysis for the non-partisan Legislative Fiscal Bureau (now called the Legislative Services Agency), working with legislators across the political spectrum.  He then spent 15 years with the Iowa Department of Human Services, where he instituted technological and other efficiencies in specific divisions and department-wide.  Neiderbach also has local government experience, having served on the Des Moines School Board for four years, including a year as Board President. He and his wife Mary live in Windsor Heights.

About the State Auditor of Iowa:  The State Auditor is responsible for state and local governments’ financial and program review, including:[i]

a. The financial condition of the state or department.

b. Whether, in the auditor’s opinion,

1. Funds have been expended for the purpose for which appropriated.

2. The department so audited or examined is efficiently conducted, and if the maximum results for the money expended are obtained.

3. The work of the departments so audited or examined needlessly conflicts with or duplicates the work done by any other department.

a. All illegal or unbusinesslike practices.

b. Any recommendations for greater simplicity, accuracy, efficiency, or economy in the operation of the business of the several departments and institutions.

Any other information which, in the auditor’s judgment, may be of value.

[i] Iowa Code  § 11.4  Report of audits

In a Facebook post on September 26, Neiderbach added,

The big questions: why didn’t she say something when she saw sloppy practices such as top management not being required to fill out time sheets or leave requests? Why didn’t she blow the whistle when she saw other top management getting paid without working normal hours? And if not for the Des Moines Register’s story and subsequent investigation of SOS personnel problems, would Mosiman have kept the extra cash?

For months we’ve heard about sloppy personnel practices throughout state government. Money is being squandered, and who knows what other messes are out there. PLEASE LIKE/SHARE IF YOU AGREE we need a thorough, independent audit of State government’s human resources policies and practices by someone who is willing to rock the boat and push for efficient and business-like operations.

Full text of Deputy State Auditor Warren Jenkins’ September 25 report:

Auditor report Schultz Gibbons 1 photo AuditorReportGibbons1_zpsd226f9a2.jpg

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Auditor report Schultz Gibbons 4 photo AuditorreportGibbons4_zps3acc8a90.jpg

Auditor report Schultz Gibbons 5 photo AuditorreportGibbons5_zpsdea5e401.jpg

Auditor report Schultz Gibbons 6 photo AuditorreportGibbons6_zps47b77b70.jpg

Auditor report Schultz Gibbons 7 photo AuditorreportGibbons7_zps6bcf4341.jpg

Auditor report Schultz Gibbons 8 photo AuditorreportGibbons8_zps8b4fe6cd.jpg

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