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May 18, 2017 04:57 PM

Auditor's Special Report Following GEAR UP Money Expected Friday

Pierre, SD

The entire state has been waiting for a special report from state auditors that followed the GEAR UP grant money beyond Mid Central's doors and into other organizations. 

According to the Auditor General's office, South Dakota got $18 million in federal money from 2006 through 2015 for the college readiness program, GEAR UP.  

$11 million of that went to Mid Central Educational Cooperative between 2012 and 2015 to administer the grant program. 

You'll remember that the state pulled its contract with Mid Central to run the program after troubled audits in 2014 and 2015.  An unnamed individual reported the initial concerns over the misappropriation of GEAR UP grant funds to the Department of Legislative Audit in 2014. 

Then a second unnamed individual came forward with more concerns after Mid Central Business Manager Scott Westerhuis killed his family, set fire to his home and then killed himself on September 17, 2015. 

Investigators contend that Westerhuis stole up to $2 million of the grant money.
But that money also went to the American Indian Institute for Innovation, which ran GEAR UP programs in reservation schools. 

Former head of AIII, Stacy Phelps, is currently facing trial for allegedly altering contracts to keep auditors to looking at AIII's books.  

Initial audits on the GEAR UP funds and the Department of Education came out in March of 2016. However, state auditors continued to follow the money beyond Mid Central to other entities that got the millions.  

The special audit report, as well as an audit of Mid Central for Fiscal Year 2016, was first sent to Mid Central Educational Co-op, which has until Friday to respond.   

Auditor General Marty Guindon tells KELOLAND News he will release those reports on Friday, as promised.  Once we receive them, we will bring them directly to you. 

Meanwhile, if you'd like to follow our investigative reports from the time of the Westerhuis murders and suicide through today, we've put them on a timeline for you on  

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