Criminal investigation into RPC

The Area XV Regional Planning Commission office is located in the lower level of the Rosenman Video Conferenciin & Training Center. - Courier Photo by: Doug Sundin

w/DOUG photo

OTTUMWA — A state audit has concluded the Area XV Regional Planning Commission overbilled area communities by more than $90,000 on different Community Development Block Grant projects and alleges the organization’s executive director altered staff timesheets, prompting a criminal investigation by the Iowa Attorney General.

The special investigation was requested by the AG’s office following allegations brought to light in a lawsuit filed by a former Area XV RPC housing director.

“We started [the audit] procedures in late December of 2006 and we just finished up in February. Just recently we were able to interview the individual who filed the lawsuit [against the Area XV RPC],” said Iowa State Auditor Dave Vaudt during an interview with the Courier.

The audit examined the RPC’s books from July 1, 2000 through June 30, 2006.

In his investigation, Vaudt concluded the timesheets prepared by the commission’s employees were altered by the RPC Executive Director Ellen Foudree. The audit alleges that hours were changed between programs and projects and explanations for the changes could not be provided. In addition, there are allegations that Foudree did not properly allocate the hours recorded on the employees’ timesheets between programs.

Vaudt said the timesheets prepared by the commission’s employees did not consistently document time spent on individual CDBG projects administered by the commission.

The RPC is funded from dues and various program grants and serves a 10-county area including all communities within those counties. A primary function of the commission is the administration of CDBG projects for those communities.

According to the auditor’s report, the number of hours recorded on the employees’ timesheets did not support the time billed to the cities for administering the CDBG projects, and the hourly rate billed to the cities could not be supported.

In the auditor’s report, Foudree claimed that the billings were based on a “benchmark” of estimated completion of each project and each project was eventually billed the maximum amount allowed by the project’s grant.

This, however, goes against CDBG guidelines. According to Vaudt’s audit, cities are only to be billed for the actual expenses incurred. What was found is that the commission had billed a number of the cities the maximum amount allowable, regardless of the costs incurred. Using documentation readily available at the commission, it was determined by Vaudt that 21 cities were overbilled by $91,177.

According to the audit report, the calculated cost per project ranges from a low of $23.66 per hour for an Albia water and sewer project to a high of $35.69 per hour for a Sigourney housing project. The average hourly rate for all the projects is $28.25. The hourly rate that was calculated is significantly less than the $35 per hour billed by the commission to the communities.

Area XV RPC Board Chairman Lawrence Rouw said the board of directors was surprised by the findings.

“The auditor’s office came down and met with the executive committee and board just before the report came out, but we only got a copy of the audit report a day or two ago,” he told the Courier Tuesday. “We were not aware of any alleged timesheet changing or any of the activities.”

Vaudt said the findings are now in the hands of the AG’s office.

Wapello County Attorney Allen Cook told the Courier that since the investigation had commenced before he took office, he will be meeting with the AG’s office to try and help out with the case in any way he can.

Vaudt said the report simply lays out the facts.

“We did file the report with the Attorney General’s office. It will be up to them if any additional actions will be taken,” he said.

Iowa Attorney General Spokesman Bob Brammer said the matter is under review.

“We can confirm that our office is serving in the role of prosecutor in this matter referred to us by the Wapello County Attorney’s office. There is an ongoing criminal investigation,” Brammer told the Courier. “The audit indicates that the matter is pending. We will be working with the continuing investigation and making any decisions on how to proceed from there.”

Rouw said he is unsure what the board’s next step will be.

The next board meeting will be April 22, unless a special meeting is called.

“I have no idea at this time whether that will happen,” Rouw said.

He said the board has not spoken to Foudree since they received a copy of the audit report.

“We are not far enough along to have any decisions made on what we are going to do from here,” Rouw said.

Vaudt said there are several recommendations laid out in the report for the Area XV RPC.

“There are a couple of things that can be done. We will have the board and commission look at the recommendations and possibly have them return the money to the Department of Economic Development if necessary,” Vaudt said.

The report includes recommendations to strengthen the commission’s internal controls and overall operations, including proper recording of time to the various programs and projects administered by the commission.

In addition, Vaudt recommended the commission work with the representatives of the Department of Economic Development to determine what amount, if any, of the excess CDBG funds should be repaid.

Several other recommendations include establishing and implementing a tracking system to adequately record time and costs incurred by the commission while administering specific CDBG projects; timesheets should be completed based on actual time spent on individual projects; the commission should also ensure the hourly rate used to bill cities is properly supported by the actual costs and the rate is reviewed at least annually for each type of project administered.

Foudree told the Courier late Tuesday that she had not seen the auditor’s report and did not wish to comment.

Scott Niles can be reached at (641) 683-5360 or via e-mail at sjniles@mchsi.com.



For your information

State Auditor Dave Vaudt Tuesday released a special investigation of the Area XV Regional Planning Commission lin Ottumwa.

A copy of the complete report is available at http://auditor.iowa.gov/specials/specials.htm

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