Exclusive: ISU accounting issues still delaying state financial report

Editor’s note from Laura Belin: The Governmental Accounting Standards Board and the Government Finance Officers Association now discourage use of the common acronym for this report, because when pronounced it sounds like a racial slur. Bleeding Heartland will avoid using the acronym in the future. Original post follows.

Challenges in obtaining auditable financial data from Iowa State University continue to delay the publication of the state’s Comprehensive Annual Financial Report (CAFR) covering the fiscal year that ended June 30, 2020. The Iowa Department of Administrative Services compiles the CAFR and typically publishes it by December 31. The latest edition has been held up because ISU was unable to submit its year-end financial data on the usual timetable.

The university switched to using the Workday computer system for accounting at the start of the 2020 fiscal year. While Iowa’s public universities have long sent year-end data to the Department of Administrative by October 1, ISU is still working on some “supplemental pieces” six months later.


All state and some local governments produce a CAFR. Most states complete the document within six months after the fiscal year’s end, as Iowa has done for decades.

As Bleeding Heartland previously reported, Iowa was required to post its latest annual report by January 26 on the Electronic Municipal Market Access (EMMA) website, the leading source of information on municipal bonds. The state’s budget director explained in a letter that the CAFR was late because an unnamed reporting entity “has not been able to provide the required financial information.” The letter promised the state would “complete the CAFR and promptly post to the EMMA website once full financial information from all reporting entities has been received.”

ISU communications staffer Angie Hunt told Bleeding Heartland two months ago that personnel from several university departments were helping to complete the report. She projected that all of the information “should be available by mid-February.”

The State Treasurer’s Office is responsible for posting documents to the EMMA website. Karen Austin, chief of staff for Treasurer Michael Fitzgerald, commented in a March 30 email, “We have been reaching out to DAS [Department of Administrative Services] on a regular basis to see if they have the report ready. They know that we are required to post it as soon as it is ready.”

The Department of Administrative Services’ public information officer Tami Wiencek did not respond to several inquiries in February and March regarding ISU’s data and an estimated completion date for the CAFR. Asked this week whether the agency had any comment on the status of ISU’s financial reporting, Wiencek replied on March 31, “DAS does not have an update.”


When Bleeding Heartland circled back with Hunt in mid-February, she said ISU’s “main financial reports were sent to the state” on February 15, but “the university is still working on some supplemental data” and would likely finish that work by February 26.

On March 5, Hunt said ISU staff were “still working on a couple of the supplemental documents.” In a March 30 email, she said the university was “Still working on a couple of pieces.” And on March 31, Hunt wrote, “It’s my understanding that this work is nearly finished. The main financial reports were sent to the state in February for audit/review.”

Sonya Heitshusen, communications director for the State Auditor’s office, told Bleeding Heartland on March 31,

ISU has not provided the State of Iowa a complete set of financial statements and footnote information in order for the State of Iowa to incorporate ISU into the State’s CAFR. 

As for the audit, our office received incomplete and very draft financial statements in February which did not include the fiduciary statements or any footnotes or other information needed to meet financial reporting requirements. 

As of today we have received a large percentage of what we have requested. However, many of those “supplemental” pieces we have not yet received are significant and are needed for us to be able to complete our work and give an opinion on the State’s CAFR.

I have been unable to determine whether ISU has had to redo some of the information it sent to the Department of Administrative Services in February.


ISU’s ongoing reporting problems raise questions about Workday’s ability to handle accounting for a government entity. Like Iowa’s other state universities, ISU sent its financial data to the state on time for many years without incident. Workday built a custom platform for ISU, and the university pushed the go-live date back to July 1, 2019 to allow for thorough testing of “all aspects of the Workday platform.”

Iowa’s Chief Information Officer Annette Dunn told members of an Iowa Senate Appropriations subcommittee in early February that her counterpart at ISU “indicated to me that it wasn’t a Workday problem” to get the financial data to the state. According to Dunn, “it was actually the training of their staff knowing how to do it.” However, ISU supposedly dedicated resources to training before switching to Workday for accounting. A staff reorganization, which centralized finance functions, went into effect at the start of the 2020 fiscal year as well, which could have contributed to the problems.

Dunn served as chief information officer for the Iowa Department of Transportation before being named to her current position in the summer of 2019. The DOT contracted with Workday in 2017, and that experience prompted Dunn to advocate for the state to move in the same direction. She signed the state’s two contracts with the California-based software company in October 2019 and February 2020.

While Dunn has portrayed the DOT’s experience with Workday as an unqualified success, Erin Jordan reported for the Cedar Rapids Gazette last month that the transportation agency still hasn’t started using Workday for accounting, “despite a scheduled rollout in June 2020. The finance implementation now is scheduled for May, Iowa DOT spokeswoman Andrea Henry said Thursday [March 11].”


Shortly after Dunn signed the state’s first Workday contract, State Auditor Rob Sand and his top staff discussed the planned computer transition with the chief information officer and senior staff in the governor’s office. In this November 2019 email, first published by the Iowa Field Report, Sand’s chief of staff John McCormally thanked the others for addressing “our previous concerns about the process,” adding that his colleagues “are excited that the state is moving in this direction and replacing the outdated systems.”

McCormally flagged one potential problem: “Going forward, our only remaining concern is the ability to retrieve auditable data from the system. However, I’m told that during a recent interaction with DOT, we were able to get data from the Workday system that worked well. Hopefully, that continues as the transition progresses.”

ISU’s experience following its first year using Workday for accounting shows that concern was well-placed. State government is supposed to start using the company’s financial software systems during the summer of 2022.

Meanwhile, the state of Maine “is threatening to terminate” its contract with Workday “and demand a $21 million refund after the contractor walked off the job” in February, the Portland Press Herald reported last month. Workday was under contract to provide human resources software in Maine. Dunn told the Cedar Rapids Gazette’s Jordan, “that has not been our experience and we have successfully implemented the HR portion of Workday at the DOT.” The rest of state government is scheduled to start using Workday for human resources this summer.


I wondered whether Iowa’s failure to publish a CAFR on time might affect the state’s credit rating or that of ISU, which has sold bonds to fund various projects. The state’s bond counsel, who recommended posting the letter on the EMMA website explaining the delay, did not think the late CAFR “would be an immediate risk to our credit rating,” Austin of the Treasurer’s office said in February. Reached for comment again this week, her view hadn’t changed. For rating agencies, the most important factor is whether entities are making bond payments on time, which Iowa is doing, Austin noted.

The Iowa Board of Regents, which is the governing body for state universities, has a continuing disclosure obligation to file financial information within 270 days of the end of a fiscal year. That time frame has now expired for the 2020 fiscal year. Josh Lehman, communications director for the Regents, commented via email on March 31, “The university has filed its unaudited financial information in accordance with its disclosure obligations, and will follow up with audited financials when those are available. There are no anticipated changes to ISU’s credit rating.”

UPDATE: Hunt stated in an April 6 email that ISU “has sent the remaining documents to the state.”

Top image: Cover photo from the state of Iowa’s Comprehensive Annual Financial Report covering the 2019 fiscal year.

About the Author(s)

Laura Belin

  • Look, gray-headed coneflowers blooming in the photo at the top!

    It’s a Wildflower Thursday, and I’ll take it gladly and gratefully.