DES MOINES, Iowa —

The Iowa Department of Health and Human Services failed to properly oversee one of its mental health subcontractors, allowing federal dollars to be mishandled and left unpaid, according to a special investigation released by the state auditor.

The audit — requested by DHHS itself — examined financial transactions between the agency and Crossroads Behavioral Health Services, a nonprofit that has operated since 1975 and holds several state contracts to provide outpatient mental health and addiction treatment.

Crossroads had subcontracted some of its work to Zion Integrated Behavioral Health Services, another nonprofit serving several southwest Iowa counties, including Adair, Cass, Dallas, Fremont, Montgomery and Page.

Trouble surfaced in January 2024, when Zion alerted

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