Reynolds directs return of CARES funds spent on IT upgrade

DES MOINES – Governor Reynolds has directed the Iowa Department of Management to return $21 million to Iowa’s Coronavirus Relief Fund. The funds were initially allocated for payments related to the state’s contract with Workday, a cloud-based human resources, finance, and planning system being implemented to modernize the state’s IT infrastructure. Of the allocation, $4.45 million was spent on the project.  

“The COVID-19 pandemic only further highlighted the critical need for integrated IT systems that will improve operational efficiency and effectiveness for the State of Iowa,” said Gov. Reynolds. “Following multiple conversations with the Treasury Department last spring, we believed we had assurances that the upgrade to Workday qualified as an allowable expense. We would not have moved forward without those assurances.”   

The Department of the Treasury’s OIG affirmed its determination that payments for Workday were not allowable expenditures under the CARES Act. While the State still maintains its position that these are allowable expenditures, it respects the decision and will return the funds by December 18. 

Replacing the State’s outdated IT systems remains a critical need, and has received overwhelming bi-partisan support from the Legislature and elected officials. As such, the Workday implementation will continue as planned. The estimated costs and timelines of the project have not changed. Supplemental funding will needed to support the completion. 

Iowa received a total allocation of $1.25 billion from the Coronavirus Relief Fund established by the federal Coronavirus Aid, Relief and Economic Security (CARES) Act. The $4.45 million spent on Workday represents just 0.36% of the total funds, while more than 96% has been allocated to programs that have provided direct relief for Iowans. 

  • More than $76M to support Iowa families   
  • More than $126M to support small businesses and non-profits  
  • More than $110M to support Iowa farmers and producers  
  • $125M to support Iowa communities  
  • Nearly $112M to support Iowa health care providers 
  • $490M for the Unemployment Trust Fund, creating tax relief for 40,766 employers    
  • $35M for Broadband Expansion Grants  
  • $127M for COVID-19 operations  

The State will allocate the remaining $47.3 million by the December 30 deadline, but an extension from the federal government would allow time to use the funds to create additional programs and support other needs among Iowans.  Governor Reynolds strongly encourages Congress to work together and make additional support possible for American families, workers and businesses before the end of the year. 

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