Sixth District Correctional Services employees said they long suspected financial improprieties, but had been dissuaded from talking with board members and faced retaliation if they spoke up.
About 100 people – more than half of the district’s workforce – turned up Wednesday to talk with Department of Corrections Director John Baldwin. The employees, ranging from probation officers to clerical staff, peppered Baldwin with questions about a January report from the State Auditor showing the district had misspent more than $700,000.
“You’ve have some concerns about the district in the past,” said Julie Schultz, a probation and parole officer and AFSCME representative. “Why did you not come to the board and head this off at the pass?”
The Corrections Department had stopped decades-past illegal or unethical practices, such as a $500 clothing allowance for managers and fees charged offenders even if they didn’t use services, Baldwin said.
But it’s murky whether Iowa's eight correctional services districts are state agencies governed by the Corrections Department, he said.
State code says the districts are contractors ruled by local boards, Baldwin said. Yet, district employees are paid mostly with state money, receive state health benefits and are subject to tort claims.
“You are thought of more and more as state employees,” Baldwin said.
The State Auditor’s report identified $776,000 in improper disbursements from the district that provides parole, probation and other community-based corrections in six Eastern Iowa counties, including Linn and Johnson.
The bulk of the misspent funds -- $563,000 – went to the Community Corrections Improvement Association, a nonprofit started by the district’s former director, Gary Hinzman. The CCIA had been using state vehicles, cell phones and office space without payment for at least several years, the report said.
Baldwin signed off on at least one district contract providing office space to CCIA. The 2007 contract for professional services says CCIA would provide Batterers Education programming, the Youth Leadership Program in participating school districts and training for offenders reentering the workforce.
In exchange, the district agreed to give CCIA $200,000 and free office space.
District/CCIA contracts for 2008 to 2011 omit signature lines for Department of Corrections management. District Director Bruce Vander Sanden, who took over leadership of the agency when Hinzman retired May, said Hinzman told staff Baldwin decided he no longer needed to sign the contracts.
Baldwin said Wednesday he saw no red flags when he signed the 2007 contract.
District employees said Wednesday they were embarrassed to be associated with improper misspending by management. When Baldwin suggested they need to voice concerns with the board, several employees quoted a district policy prohibiting them from talking with board members unless they get permission from management.
Vander Sanden said employees will have an opportunity to address the board at a meeting later this month.
Baldwin said the 6th District will need to cut costs to repair its budget shortfall. Since more than 90 percent of the district’s budget is payroll, this could mean layoffs or pay cuts, he said. The district also had the highest out-of-state travel costs in a recent report.
Baldwin described the district as “an agency that’s in turmoil and needs help.”But the Corrections Department is prepared to help the district dig out, he said. Baldwin plans to retire in 2015, but said he’ll do all he can before then.