Bill to let state agencies hire private CPAs in limbo

DES MOINES — A bill that would let state agencies hire private certified public accountants rather than have the state auditor’s office review spending is in limbo in the Iowa House.

Senate Republicans approved the bill in February, the first bill to pass the Senate this year. This morning, Republicans on a House subcommittee decided to let the House State Government Committee chair decide the bill’s fate. Republican Representative Michael Bergen of Dorchester, an accountant, is not recommending the committee pass the bill.

“There might be some additional costs and added inefficiencies, too,” Bergan, the subcommittee chairman, said after the hearing.

According to the Legislative Services Agency, it could cost up to three times as much to have private CPA firms rather than State Auditor’s Office staff conduct the annual audits, plus Bergen said private CPA audits of state agencies could make it difficult for the state auditor to compile a required annual report on how the state spends federal funds.

Brad Epperly, a lobbyist for the Iowa Society of CPAs, said the group is neutral on the bill and he suggested if the bill goes into effect, state agencies would have to hire out-of-state CPA firms to do the work.

“As of right now, I don’t know that we have any members that would have the ability to do the audits,” Epperly said.

State Auditor Rob Sand, the only Democrat elected to statewide office, has said letting state agencies pick who audits the books could conceal corruption. Representative Adam Zabner of Iowa City, a Democrat from Iowa City, voted no on the bill in subcommittee.

“Auditor Sand does a nice job. To be honest, it really doesn’t matter what I think. It matters what the voters think and they reelected him to come back and be in charge of audits for the State of Iowa,” Zabner said. “I don’t like the idea that the legislature can circumvent that.”

There were a handful of speakers at today’s House subcommittee hearing on the bill and no one spoke in favor of it.