House investigates misallocation of $26 million

The highlight of the week for me was being invited to participate in a Government Oversight Committee hearing regarding the Judicial Branch’s misallocation of over $26 million of court debt that was supposed to go to victims of crime and other groups.

But first, an update on the supervisor districting bill.

Last week, Gov. Reynolds signed into law Senate File 75. The new law requires counties with a regent university to adopt and use “plan three” for board of supervisor representation. So this applies to Johnson County but not Iowa County.

Plan three requires counties to draw districts and requires a supervisor to live in and be elected by the residents of that district. This legislation will improve local representation and accountability at the county level.

By using districts in these counties, the law promotes a more fair representation structure. This is particularly important in areas with highly transient populations, as it allows for better representation of all county residents, particularly rural and small-town residents.

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I’ve heard some confusion out there about who gets to draw the districts. Sen. Driscoll and I do not draw them. The current supervisors do not draw them. The parties do not draw them.

The non-partisan Legislative Services Agency draws the district map. Under this law, LSA must draw the districts by Jan. 1.

Folks are naturally curious about the process. Here are the basics:

•Johnson County must form a temporary county redistricting commission by May 15.

•That commission must complete a precinct plan by Oct. 1 and submit it to the state commissioner of elections.

•LSA will then draw and publish the district plan by Jan. 1, 2026.

•New supervisors will then be elected by district in the 2026 midterm elections.

Thanks to those of you who made it to the Capitol for the bill signing. It was great to see you.

On Wednesday, April 17, the House Government Oversight Committee held a public hearing regarding the improper distribution of over $26 million of court debt by the Judicial Branch.

Over $7 million of the court debt was supposed to go to funds for the victims of crimes. Four years later, that money is still not going to victims.

Although I am not technically a member of this particular committee, I was asked to participate due to my background as an Assistant U.S. Attorney. (After the hearing, someone told me that I had been in “interrogation mode.” I was. This is a serious issue.)

For almost three hours, we questioned Judicial Branch staff in an effort to better understand (i) how such a large amount of money could be misallocated for years, (ii) why the funds have not been returned to the correct accounts, and (iii) why the legislature was not notified for years.

As background, the Judicial Branch is required to distribute court fees and fines based on a formula set in Iowa code. Fees and fines are paid to the clerk of court in all 99 counties. That money is then distributed, by the Courts, to the General Fund, other state funds, and non-state funds (primarily counties).

Over the past four years, the annual total collected has been around $150 million.

In 2020 and 2021, the General Assembly adopted two bills that made several changes in how these fees and fines are distributed. The bills passed with overwhelming bipartisan support and were expected to be implemented by the courts.

By the fall of 2020, the Judicial Branch was informed by one group that money was not going to the correct location, and by 2021 it was clear there was a significant problem.

From 2020 until late 2024, the Judicial Branch attempted to find the problem and fix it, but during that same time, money was continually being misplaced.

In the fall of 2022, the Department of Transportation alerted the State Auditor’s Office and the courts of an irregularity in the collection and distribution of money paid for tickets issued by Motor Vehicle Enforcement officers in fiscal years 2021 and 2022.

The State Auditor’s Office acknowledged receipt of the notice and said they would take it from there and be in touch with follow-up questions. Two annual audits of the Judicial Branch — issued years late — failed to even acknowledge that $26 million had been misallocated.

A few months ago, for the first time, members of the legislature were notified by the Judicial Branch that there were misallocations over the past four years that totaled over $26 million. House Republicans immediately began asking questions to better understand how and why the courts chose to keep that information to themselves.

This first hearing revealed some disconcerting things, including that the courts have already spent over half a million dollars in an attempt to correct their misallocation issue, and the problem still is not completely resolved.

Funds impacted by the Judicial Branch’s misallocation include the Victims Compensation Fund, the Human Trafficking Victim Fund, the Juvenile Detention Home Fund, the Emergency Medical Services Fund, the DARE Surcharge Fund, the Criminalistics Laboratory Fund and the Road Use Tax Fund.

My frustration is not that someone made a programming mistake. It is that for over four years, $26 million of funds was misallocated (including over $7 million that was supposed to go to the victims of crimes like battered spouses), and the Judicial Branch did not notify the legislature, all while spending over half a million dollars to only partially solve the problem and all while lobbying the legislature for more of your taxpayer money every year.

The Oversight committee will continue to ask questions of the Judicial Branch and others involved in this significant issue.

Several bills that we moved out of the House Commerce Committee have now passed both the House and Senate chambers and are eligible for the Governor’s signature.

HF 857 — Trigger Leads — This bill prohibits financial institutions from using an unfair or deceptive practice when using prescreened mortgage trigger lead information from another financial institution.

HF 875 — Credentialing Timeline — This bill provides a timeline for an insurer to respond to a provider seeking to be credentialed in-network and to provide a reason for denial.

SF 470 — Dental Insurance — This bill makes the following changes to dental insurance:

•Prohibits a dental carrier from denying a claim submitted for a service approved by prior authorization, with certain exemptions.

•Requires dental carriers to disclose to dental providers whether the covered person’s dental care services plan is state regulated.

•Sets up an appeal process when an overpayment is made to a dental provider by a dental insurer, makes notice requirements regarding overpayments, and allows for withholding on a future claim if certain information is provided.

HF 879 — Infrastructure Sabotage — This bill adds cable services, information services, and wireless services to the definition of critical infrastructure under the sabotage law. A person who intentionally causes interruption of a fundamental service through critical infrastructure commits a Class B felony.

SF 460 — Home Inspectors — This bill outlines requirements for independent home inspectors including registration or licensure, written information provided to the customer, insurance coverage, and violations that constitute an unlawful practice.

If you have any questions about these bills, let me know.