Iowa’s Office of the Auditor of the State and Auditor Mary Mosiman released a special investigation report Thursday detailing the results of a fraud investigation on the Iowa Communication Network (ICN) for the period of Jan. 1, 2015 to Jan. 2, 2018.

The ICN is an agency governed by the state that provides a number of technological services to many education, healthcare, government and public safety organizations in Iowa. This includes providing high-speed internet to Iowa State University.

Mosiman’s report shows a “number of management decisions made by Richard Lumbard, former ICN Executive Director, which were not in the taxpayers’ best interest.” These decisions led to unnecessary costs to the taxpayer, according to the report. Lumbard was fired effective Jan. 4, 2018.

The report goes through each “management decision” that Lumbard made that was found not to be in the taxpayers’ best interest.

In June 2017, Lumbard planned the purchase of two semi-trailers and one semi-tractor, totaling $49,800. Lumbard “did not follow the other typical approval and authorization processes followed by ICN when making purchases.”

Lumbard is also the CEO of Wind and Fire Ministries (WFM), whose property is where the trailers were delivered to. Equipment on one of the trailers was sold on eBay for $2,319, but that money was never given to ICN.

The investigation found that a company called Character Genetics was paid $71,186.97 from Jan. 15, 2015 to Oct. 16, 2017 for leadership training and coaching services. Lumbard had a previous relationship via WFM with this company and the proper competitive process to find such a service was not followed by ICN.

There were also a number of “personal connections” that the investigation by Mosiman identified as concerning.

Jessica Jensen was hired on Feb. 13, 2015 as an executive secretary. Jensen had a previous work relationship with Lumbard at WFM. Jensen recieved a 14 percent raise after six months and another 12 percent raise a year later.

Jensen never received a promotion, but over two and a half years her salary increased by more than 40 percent, which the investigation found “exceeded increases provided to other ICN employees tested.”

Jensen’s company card also purchased four Google Home units that totaled $546.96, which was an improper use of ICN funds.

T.J. Boulet was hired as Executive Officer 2, but “he did not meet the minimum qualifications established by DAS-HRE for the position.”

Jensen and Boulet were also fired along with Lumbard, effective Jan. 2, 2018.

Lumbard was also found to have cost ICN $50,019.04 for personal use of state vehicles, which is prohibited.

Mosiman’s investigation concluded that $379,547.65 of “improper disbursements and undeposited collections” were spent due to Lumbard’s actions. 

The investigation began due to concerns expressed by other ICN executive directors specifically about the semi-trailer purchases.

The report detailed each one of these management decisions. Copies of the report were filed to the Division of Criminal Investigation, the Polk County Attorney’s Office and the Attorney General’s Office.

The ICN released a statement responding to the release of the report.

“As the audit report indicates, as soon as we became aware of suspicious activity regarding the trailer equipment, we immediately notified the Attorney General’s Office and the State Auditor,” said Philip Groner, acting executive director in the statement. “We fully cooperated with the Auditor’s investigation, and turned over all requested information. The activity outlined in the Auditor’s report is isolated to the actions of the former Executive Director who is no longer employed by the State. The actions of Mr. Lumbard fall short of the standards we set for ourselves and that our users and the public have a right to expect from public employees.”

“We look forward to working with the Auditor’s office going forward to implement further recommendations they provided in the report,” Groner said.