The Iowa Workforce Development agency’s director says he’s shocked by the “exorbitant” salaries earned by two officials in a central Iowa job training program that’s financed by the federal government. But Iowa Workforce Development director Richard Running says while his agency oversaw the program, he was unaware of the six-figure salaries earned by the top two administrators — despite the fact an employee of his own agency tipped off the state auditor.

“When I found out about it, I was shocked, dumfounded,” Running says. “I could not believe that this would happen.” Running says his first reaction was to fire someone, but Running found out he cannot until federal authorities conclude their investigation. “We haven’t fired anybody,” Running says. “At this point, we will abide by the outcomes that are determined and worked out with us by the Department of Labor and the Department of Human Services and their Inspector General offices.”

Running says the U.S. Department of Labor just audited federally-financed job training programs in Iowa. “The monitoring reports based on a sample of transactions produced nothing that indicated excessive salaries,” Running says.

But State Auditor Dave Vaught says federal funds were used to not only finance “excessive” salaries, but pay bonuses to the top two administrators of the Central Iowa Employment and Training Consortium. The non-profit group is to use federal taxdollars to train workers in Boone, Dallas, Jasper, Madison, Polk, Story and Warren Counties. The C-E-O and C-O-O each were paid over 360-thousand dollars for the last federal budgeting year.

Vaudt says federal guidelines call for “reasonable” salaries, and no other job training program in the state paid executives even close to that much. Vaudt says his investigation found the state Workforce Development agency in one instance gave preferential treatment to the group when distributing unexpected federal funds.

The auditor says the Workforce Development agency failed in its role as watchdog of how those federal funds were being spent. The agency’s director disagrees. “It seems like that’s what he was saying,” Running says. “But we don’t agree with everything that’s in the auditor’s report.” Running says the books of the central Iowa job training program, along with the other 15 in the state, are regularly reviewed by independent auditing firms and he and his staff review those.

But Running says those independent audits “never provided the detail” that would have indicated the administrators were getting “gross, excessive compensation” as was shown in the State Auditor’s report.

Senator Mary Lundby, a Republican from Marion, says today was just the beginning of the legislature’s investigation of this. “We are very concerned,” Lundby says. “We are very interested in finding out the facts that are involved.” Lundby is a co-chair of the Legislature’s Oversight Committee which is launching its own review.

Senator Tom Courtney, a Democrat from Burlington, is another co-chair of the panel.
“This is very important. We’re talking about the working men and women of Iowa,” Courtney says. “We will get to the bottom of this. That’s what I believe oversight is all about.” Des Moines City Councilman Archie Brooks is the chairman of the board and the auditor’s investigation found Brooks approved the salaries and bonuses for the program’s administrators.

During an interview with the Des Moines Register which has been published on the paper’s website, Brooks was asked about the salaries he approved, and Brooks told the Register he had a stroke eight months ago and has problems with his memory. Brooks told the paper he did not keep a running total of the salaries and bonuses he was approving, but Brooks said he did nothing illegal.

The State Auditor warns Iowa taxpayers may have to repay the federal funds which were misspent, but Running — the director of Iowa Workforce Development — contends the counties that are part of the Central Iowa Employment and Training Consortium. The Legislature’s Oversight Committee has asked Ramona Cunningham, the training program’s CEO, and Brooks to testify at the statehouse tomorrow (Tuesday).