Contract cost for company running Iowa's ESA program has doubled, state auditor says

The company overseeing Iowa's education savings account program is being paid more than the state originally agreed to after the contract was amended without adequate documentation, according to an annual audit of the Iowa Department of Education.

Gov. Kim Reynolds signed the education savings account law in 2023, allowing families to apply for about $7,800 per child in taxpayer-funded scholarships to pay private school expenses such as tuition and fees.

The state contracted with Odyssey , an out-of-state company, to oversee the disbursement of funds. The initial contract said Odyssey would be paid $682,333.75 in the first year and $729,550 in subsequent years.

An audit released Tuesday by State Auditor Rob Sand says the state later amended the contract with Odyssey to increase what the company would be paid but failed to provide documentation to justify the amended contract.

"A deal is a deal is a deal," said Sand, the only Democrat holding statewide office in Iowa. “And I think every Iowan knows that if someone comes back to you and says, ‘Hey, thanks. I'm gonna double costs but I'm not giving you anything extra' that you're being had.”

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