Feds say Iowa misspent $10.5M in flood aid - KWWL - Eastern Iowa Breaking News, Weather, Closings

Feds say Iowa misspent $10.5M in flood aid

DES MOINES (AP) -- Federal auditors say Iowa officials misspent more than $10.5 million in federal flood aid for Cedar Rapids businesses.

The audit by the inspector general's office of the U.S. Department of Housing and Urban Development says 305 forgivable loans were improperly awarded to Cedar Rapids businesses through the Jumpstart Iowa Small Business Assistance Program.

The audit, released earlier this week, faults the state's Department of Economic Development for oversight problems, particularly for failure to ensure that the businesses receiving grants complied with a key eligibility standard established for the program.

Cedar Rapids City Manager Jim Prosser says the issue is about proper documentation and that he is confident the matter will be cleared up shortly.

Gov. Chet Culver's office declined comment but said a statement would be issued later.

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