KDSN RADIO News
State Auditor questions contract to pay vendor double for managing Iowa's ESA program
State Auditor Rob Sand is raising questions about changes in the state contract with Odyssey, the company managing taxpayer funded Education Savings Accounts for private school students in Iowa. Sand says the company will be paid double what was in the original contract.
"No reason or justification has been provided for the cost increase," Sand told reporters on Tuesday. "The department did not follow its own procedures and rules that it's supposed to follow any time it amends a contract."
Sand, the only Democrat serving in statewide office, says state officials who renegotiated the contract added fees, like a five cent payment for every transaction and 25 cents for every 100 dollars worth of expenses Odyssey manages.
"The State of Iowa had a deal and a deal is a deal is a deal," Sand said. "Why are we giving away tax dollars after already negotiating a contract?"
A spokesperson for the Iowa Department of Education says the agency decided to cover the transaction fees rather than having those costs deducted from the students' accounts. The state-funded E-S-A may be used to cover tuition and other private school expenses. Sand says a conservative estimate indicates the state will send an additional two-point-three MILLION dollars to Odyssey by 2027. The state deposited nearly 130 million dollars into Education Savings Accounts for low income private school students last year and could spend over 230 million dollars on the program this fall if all eligible applicants enroll in a private school.
