An audit conducted by the inspector general’s office of the U.S. Department of Housing and Urban Development claims the state’s Department of Economic Development improperly awarded more than $10.5 million in federal grants for flood-damaged businesses in Cedar Rapids.
The accusations, which were first reported Friday morning by The Des Moines Register, point to lax oversight by the state in how it awarded grants through the Jumpstart Iowa Small Business Assistance Program.
From The Register:
The audit’s criticism of the disaster funds program marks the second time in recent months that the Department of Economic Development has come under scrutiny. Department Director Mike Tramontina resigned in September after irregularities were found in the Iowa Film Office, which administered state tax credits to filmmakers.
In the Jumpstart case, HUD auditors said state and Cedar Rapids officials who administered the program failed to verify that grant recipients didn’t receive duplicate benefits though any other disaster assistance programs, insurance or other source.
A state-level review is underway, but IDED officials deny any wrongdoing. Gov. Chet Culver’s office did not respond to a request for comment Thursday by The Register or Friday morning by The Iowa Independent.