The Iowa Association of School Boards isn’t facing insolvency, but a lawyer who’s been hired to sort out the group’s affairs says some association services may be scaled back. Des Moines attorney Nolden Gentry was hired last week after a series of financial irregularities came to light, including a salary for the group’s executive director that was not approved by the association’s board of directors.
“We will do everything we can to make certain that there’s no interruption in service,” Gentry says.
The association manages a wide array of services, like helping school districts form foundations for private fundraising and helping schools obtain school bus insurance.
Representative Vicki Lensing, a Democrat from Iowa City, says the Iowa Association of School Boards’ board of directors should have seen “red flags” that something was going wrong in the same way things were mismanaged at the Central Iowa Employment and Training Consortium where top managers were overpaid and have been sentenced to jail for their financial misdeeds.
“Some of us who went through this with CIETC, it’s like you think something is made pretty clear, you take for granted that’s going to happen,” Lensing says.
Lensing is co-chair of the Legislative Oversight Committee. The panel held another hearing today, asking questions of the lawyer and private auditors who’ve been trying to sort through financial records for the Iowa Association of School Boards. C.P.A. Ted Lodden and his auditing firm have been reviewing the group’s accounts for five years and he says it’s been hard to judge just how deep the association’s “financial crisis” may be because they’re still sifting through and trying to find documents.
“Let me say this: certainly things are not great,” Lodden told legislators this morning. “It’s sort of a combination of a perfect storm.”
Lodden cites stock market losses for the association’s investments, along with some of the group’s management problems. Lodden’s auditing firm estimates a for-profit business that’s owned by the Iowa Association of School Boards has a $2.4 million operating loss. Outside bond attorneys are owed another $2 million in connection with an investment service the association runs.