Sioux Falls resident Michael Wyland of Non-Profit quarterly has an interesting article on that website about how the Mid Central Educational Coop’s attempts to drag State Representative Kyle Schoenfish’s Accounting firm into a lawsuit filed against the Coop is primarily smoke and mirrors, and not one that’s likely to work:
In response to the unfolding lawsuit, MCEC has taken the unusual step of filing papers with the state court asking that the education cooperative’s auditors be held liable of any damages resulting from the class action lawsuit.
and.
The filing goes on to say if MCEC is found to be at fault in the class action, “such fault is slight in comparison to the fault of Schoenfish & Co., Inc.”
Blaming the auditors is highly unlikely to be successful for at least three reasons. First, audits are not designed to uncover criminal activity such as embezzlement. Second, audits are dependent upon management’s representations of the organization’s finances. If management misrepresents the finances with skill, the auditors won’t know it. Third, the auditors in this case noted material weaknesses in MCEC’s financial controls as well as missing or incomplete management reports expected of federal grantees. The 2014 audit prepared for MCEC included a note from the auditors that it was the eighth year material weaknesses had been reported to the MCEC board of directors.
The tragedy of GEAR UP is more than the deaths of six people and the alleged embezzlement of millions of dollars. The real damage done to Alyssa Black Bear, Kelsey Walking Eagle-Espinoza, and other Native American plaintiffs likely to join the class action is in the misadministration of the GEAR UP program from its inception in 2005 through the following decade.