- Associated Press - Tuesday, April 5, 2016

DES MOINES, Iowa (AP) - The agency that oversees Iowa’s flagship history museum spent money designated for renovation planning to partially pay for administrators’ salaries, highlighting a potential loophole in a law that outlines how infrastructure funding should be allocated.

Payroll documents obtained by The Associated Press show the Iowa Department of Cultural Affairs diverted more than $176,000 from a special infrastructure fund over two budget years to pay a portion of Director Mary Cownie’s salary and the salaries of two senior staff members.

The agency insists the move was legal, but Sen. Matt McCoy, the co-chairman of the subcommittee that oversees the release of infrastructure funds, said spending the money on department salaries is unusual and would “destroy the integrity” of the fund.

“If this is happening, and if it’s been allowed to happen, and we need to change the law, then we’ll have to change the law,” said McCoy, D-Des Moines.

Department spokesman Jeff Morgan said that because the three employees spent time on museum renovation planning, it was appropriate for parts of their salary to be paid under the Rebuild Iowa Infrastructure Fund, which collects gaming tax money and is separate from the general fund that usually covers state salaries.

In an interview Tuesday with The Associated Press, Cownie pointed to special wording added to some of the designated infrastructure appropriations. She said it allowed more spending flexibility under the fund.

“This was perfectly appropriate and allowable,” Cownie said.

Ben Hammes, a spokesman for Gov. Terry Branstad, agreed with the department’s interpretation of the law. However, McCoy called the exemption vague and said it wasn’t clear whether salaries should have been paid through the fund.

Since 2012, the Iowa Legislature has given the department $3.65 million from the fund for immediate repairs to the museum in downtown Des Moines and for planning and design work for a possible renovation of the building.

Over the 2015 and 2016 budget years Cownie was paid more than $45,000 of her current salary from the infrastructure fund. Department Deputy Director Chris Kramer received more than $96,000 of her current salary from the fund. Susan Kloewer, administrator of the State Historical Society of Iowa, a division within DCA, was paid more than $34,000 of her current salary from the fund.

Sen. Tod Bowman, D-Maquoketa and a member of the infrastructure subcommittee, said the practice is not clear even if the department said it had the authority to spend the money.

“How did they calculate that amount to be used for their salaries? And is that a legitimate practice? And if so, that’s something we need to change,” he said.

The department is asking lawmakers for $65 million in infrastructure money for renovations to the museum. The request, which has the support of the governor, has been publicly criticized by top historians in the state who say the renovation won’t properly address longstanding issues over historical preservation efforts within the department.

DCA did not include information about the department salaries in a January 2016 update report to the Legislature on how they spent the $3.65 million. However, the plans were listed in a report by Branstad’s office that said the department intended to spend more than $225,000 of infrastructure money on salaries through a two-year period ending in June.

When asked about the omission to the update report, Morgan said that report doesn’t track salary information so DCA didn’t include it. He said the department provides detailed information to the Legislature upon request.

The department previously used infrastructure funds for department salaries, according to the nonpartisan Legislative Services Agency. In 2008, DCA was given $220,000 for a flag stabilization project that was later moved to expenses under the general fund. That infrastructure appropriation also included the exemption language.

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