State officials are dipping into a loan fund for multi-family housing to cover the settlements to two female employees who say the Iowa Finance Authority’s former director sexually harassed them.

There’s $9 million in the fund for loans to developers building rental housing and $4.1 million is being withdrawn to pay the settlements. Iowa Finance Authority director Debi Durham told lawmakers the money comes from developers who repaid loans over the past 40 years. “It was not a state appropriation..and the people that pay back these loans are private-sector folks that are borrowing the money for the projects,” Durham said.

Representative Mary Gaskill, a Democrat from Ottumwa, said the agency needs more oversight.

“As a former county auditor, I truly understand being accountable to the taxpayers and this $4.1 million that seems to be out there and readily available really worries me,” Gaskill said.

Another Democrat on the committee says the original loans were tax dollars in the first place, so the money for the settlements directly or indirectly came from taxpayers. Durham told lawmakers she’s aggressively evaluating the agency and the settlement payout does not mean the agency will loan out fewer dollars to housing developers and home-buyers.

“Everything is under review and everything is on the table of how we can do thing differently,” Durham said. “I assure you that what was done did not impact what we’re able to do going forward.”

Governor Reynolds fired Iowa Finance Authority direcotr Dave Jamison last March after a female employee notified the governor’s office that she felt unsafe at work due to Jamison’s behavior. Durham, who has been the state economic development director since 2011, has been the Iowa Finance Authority’s director since last month.

“You have a lot of really good people there and they went through a really, really difficult time, but, you know, we are moving forward as a team,” Durham said.

Durham said she’s not on a rescue mission, but aims to align Iowa Finance Authority programs with the job creation and retention goals of the economic development agency she’s led since 2011.