I am a District 9 state senator, the chair of the legislature’s Government Operations and Audit Committee, and a certified public accountant. In those roles, I get a lot of questions about the GEAR UP Grant and Mid-Central Education Coop. With all the news coverage and the claims being made, it is confusing and would I’d like to set the record straight with a few facts as I know them:
- The heart of this matter is an embezzlement scandal involving Mid Central Coop’s former business manager, Scott Westerhuis. Mid Central Coop was created by a group of small school districts, and it is controlled by a board made up of representatives from those districts. Auditors have found that $1.4 million from Mid Central’s bank account is not accounted for.
- That missing $1.4 million was not GEAR UP money. GEAR UP is a federal program to help at-risk high school students go to college, and in South Dakota it is used to help Native Americans. Mid Central administered the program for the State of South Dakota. The federal funds went to the state Department of Education (SD DOE). Mid Central would submit receipts to SD DOE, and if the expenses were related to the federal program, Mid Central would be reimbursed. Although some GEAR UP dollars may not have been spent effectively, the audit did not find that any GEAR UP money was missing and no money was stolen from the State.
- Secretary of Education Melody Schopp has been accused of illegal and unethical conduct which has been based on hearsay and rhetoric not facts. What hasn’t been stated correctly is because of the SD DOE oversight of the federal grant; GEAR UP had fewer problems than the other direct federal programs that Mid Central administered without state oversight. Audit Reports show the other direct federal grants (not GEAR UP) administered by Mid Central had a myriad of issues.
- In fact, although some people like to talk about “Pierre insiders” or “establishment Republicans,” that is exactly who found and exposed the Mid Central wrongdoing.
- Going back to 2012, concerns by SD DOE staff led to increased oversight of and reporting by Mid Central. The Department of Legislative Audit, which answers to the Republican-controlled legislature, found compliance and oversight problems that SD DOE attempted to require Mid Central to fix.
- And in 2015 when Mid Central failed to improve, Secretary Schopp terminated Mid Central’s contract. Even before the Westerhuis tragedy attracted press attention, our Republican-controlled Government Operations and Audit Committee held public hearings on this very issue, at which the SD DOE staff and Mid Central staff offered testimony.
- And it was Attorney General Jackley who investigated the embezzlement scandal and is pursuing criminal charges against those involved.
- South Dakota state officials have taken many steps to learn from this situation and to enhance procedures and improve operations.
- In 2016, Governor Daugaard and Lt. Governor Michels proposed a new Board of Internal Controls and adopted by the Legislature, which created strict and detailed new policies for entities receiving grants and contracts, to prevent another Mid Central-like situation from happening.
- In, 2017, Attorney General Jackley proposed legislation and adopted by the legislature that strengthened prosecutors’ ability to pursue public corruption and conflict-of-interest cases.
- In 2016 and 2017, Speaker Mickelson and myself led the efforts to create tough new laws on conflicts of interests by state employees, school officials and public board members.
- And in 2017, State Rep. Karen Soli, a Democrat, sponsored legislation to create a new Government Accountability Board, made up of non-political retired judges, to investigate and respond to ethical complaints.
- Every one of these steps have been received with broad bipartisan support.
- In 2018 Government Operations and Audit Committee will have additional proposals to shut down even more loopholes presented during the current hearings in process.
This is a big topic and I can’t cover everything in one op-ed. But I want people to know these facts. There are always those who grandstand or use a tragedy for their own political purposes. My priority for the Government Operations and Audit Committee is to understand the FACTS about what exactly happened, and to make tangible improvements to our processes to ensure nothing like this tragedy happens again.