Mary Mosiman
Mary Mosiman

October 19, 2018

State Auditor Mary Mosiman’s plea for votes in next month’s election is based on a simple premise: Her opponent isn’t an accountant and therefore can’t do the job.

Financial audits comprise the majority of the state office’s work — some audits are routine, some uncover crimes — and Iowa law requires accounting firms to be owned and operated by certified public accountants.

Mosiman is an accountant. Her opponent, Rob Sand, is not. He is a lawyer.

Mosiman argues that if Sand is elected, state law will require him to outsource the office’s financial audit work to private firms.

“It would not be as efficient, because we are the state’s leading CPA (certified public accounting) firm with governmental audits,” Mosiman said. “It would be a cost increase to government entities around Iowa, the state and local entities; therefore, it could be a significant cost increase to Iowans if the government has to pay more for their audits.”

However, Sand contends Mosiman is cherry-picking bits of the law to bolster her claim.

“I find it curious that a CPA is trying to tell a lawyer what the law means,” he said.

Sand, a Democrat, argues that the part of state law that Mosiman, a Republican, cites applies to private accounting firms, not to the state office. Others agree with him, including some prominent Republicans.

County Attorneys John Werden from Carroll County, Tina Meth Farrington from Calhoun County and Matt Wilber from Pottawattamie County were quoted in a joint press release sent out by Sand's campaign last month, saying that Mosiman’s claim about Sand has been “thoroughly debunked.” The letter included information from Bill Dilla, chair of Iowa State University’s accounting department, and Robert Lampe, executive officer of the Iowa Accountancy Examining Board.

“Mary Mosiman’s claim is unfounded,” Werden, a Republican, said in the release. “No matter the professional background of the elected state auditor, the office can continue to fulfill its duties to issue all audits.”

Mosiman, 55, is a former Story County auditor who was appointed state auditor in 2013 and elected in 2014. She seeks a second term.

Sand, 36, is a former prosecutor for the Iowa Attorney General’s office who tackled white-collar crime and most notably handled the Iowa Lottery scandal, in which one lottery employee rigged drawings so that he and his friends won.

Mosiman said that of the 250 to 270 audits issued every year at the state auditor’s office, she is part of every one of them.

“The person that signs those reports is the one responsible,” she said. “It cannot be something that is rubber-stamped by a director.”

But she doesn’t take part in the field work —the day-to-day auditing — completed by the office’s other CPAs.

“That would be inappropriate, she said. “Everybody has their own specific role, and that role is checked by the next level. If I was doing the field work, I couldn’t be doing the next level.”

Instead, Mosiman’s role is to review the work done by the managers and deputy auditors and sign off on each audit after she reviews it.

During her days, Mosiman said she meets with managers, senior staff and other departments to go over audit reports and look at what the coming months may hold as far as audits.

Mosiman said that many of her elected official duties are completed in the evenings or on the weekends. She visits cities to meet with Rotary Clubs, Chamber of Commerce offices, school board officials and more.

“I make time to make sure they understand how the state auditor’s office impacts them,” she said.

The state auditor’s office has more than 30 CPAs working in the office. They issue financial audits, performance reports, investigative audits, examination audits and more, Mosiman said.

Mosiman said investigative audits and performance reports can be completed by a non-CPA, but financial statement and examination audits require a CPA working within a CPA firm to complete them. That means the state auditor’s office would run into difficulties if it were run by someone who is not a CPA, since 90 percent of the audits the office issues are financial statement audits, she said.

Sand said Mosiman is being untruthful.

“When Democrats and Republicans are telling a CPA what the law says, they’re probably right,” Sand said.

Mosiman has referred to Iowa Code Chapter 542, which states that the state auditor’s office can only function as a CPA firm if the state auditor is a CPA.

That’s true, Sand said, but the state auditor’s office is not required to be classified as a CPA firm, as it is now, to conduct audits.

Sand referenced Chapter 11 in the Iowa Code, titled “Auditor of the State,” which explains the duties and responsibilities of the office. Chapter 542 is a “little brother” to Chapter 11, he said, because it is not the entire law.

In Chapter 11, Sand said, the word “either” is the key to understanding the rules — it states that “audits or required fiscal year examinations shall be made as determined by the governmental subdivision either by the auditor of state or by certified public accountants.”

“She’s looking at Chapter 542,” Sand said. “That has nothing to do with the state auditor’s office. The state auditor’s office is not a private firm.”

Sand said the Iowa Code Chapter 542 was added to the law fairly recently — “not within last 10 years, but since we have had CPAs as auditor,” he said. “It still doesn’t somehow invalidate Chapter 11.”

Over the years, several elected state auditors have not been licensed CPAs.

The most recent was Lloyd Smith, who worked as the state auditor from 1967 to 1978. Smith was a Baptist minister with a bachelor of arts degree from Waldorf College in Forest City. He worked for 16 years in the state treasurer’s office and nine years in the state auditor’s office before he was elected state auditor, according to The Des Moines Register.

Wilber, the Republican Pottawattamie County attorney and past president of the Iowa Association of County Attorneys who was included on the press release rebutting Mosiman’s claims, referenced another article written on the subject.

The Iowa Falls Times Citizen makes it clear, as does my own reading of the law, any argument that a CPA is required to lead the state auditor’s office is wrong,” he said. “Rob Sand can issue every audit just as all state auditors from all walks of life have done for many, many years.”