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March 23, 2016 06:00 PM

Warnings of Troubles With GEAR UP Grant To DOE Earlier Than First Reported

Sources who have first-hand knowledge within the Department of Education tell KELOLAND News there were questionable expenses involving GEAR UP grant money as early as 2006 that were brought to the attention of department officials. 

Several sources have confirmed that the department was warned of the misuse of grant money again in 2010 and 2011 by then-directors of Indian Education, LuAnn Werdel, followed by Roger Campbell. 

KELOLAND News spoke with Roger Campbell Wednesday. He told Angela Kennecke he left the Department of Indian Education by his own accord, and could not help regarding issues with the GEAR UP grant during his time in office. 

When KELOLAND News reached LuAnn Werdel, she said she did not want to comment. 

In a statement Wednesday, the governor's office did not dispute those warnings, but said they cannot comment on personnel actions.

The 2015 legislative audit of the GEAR UP program released this week found that the Department of Education opened itself up to significant risk of fraud, waste and abuse, because of the multiple roles that people like Stacy Phelps and Scott Westerhuis held in the administration of the GEAR UP grant.

But when KELOLAND News questioned Education Secretary Melody Schopp - in the only interview we have been granted with her, in November - on that very thing, including Westerhuis' role of keeping track of the grant budget itself, she had this to say: 

Angela Kennecke:  "So it's not usual? You wouldn't consider it to be a conflict of interest for him to be their match specialist or budget specialist, or whatever you want to call it, as well as the accountant for Mid Central? 
Melody Schopp: "You would hope the same person who was overseeing the general finances of that organization--I guess the direct answer to your question is no, we don't see that as a conflict because he was in charge of the entire budget of Mid Central Cooperative."

In response to the newly released legislative audit, the Department of Education said it will do a more in-depth review of key staff and require conflict of interest polices and disclosure of any related parties. 

I've asked Governor Dennis Daugaard and Secretary Melody Schopp for interviews in response to the new information contained in the legislative audit and the about when and just how much the Department of Education knew about problems with the GEAR UP grant, but my request was denied by the governor's office. 

Governor Daugaard did issue a statement in support of Schopp, following the charges filed last week against two former Mid-Central employees and a GEAR UP program administrator. 

Dan Guericke, Stacy Phelps and Stephanie Hubers all made their first court appearance this week. But their cooperation with investigators may be key to more arrests in the case.

Our KELOLAND News investigation has new information on Assistant Business Manager Stephanie Huber's close ties to the Westerhuises and her actions in the days following the Platte tragedy.  

Shortly after the Westerhuis bodies were found, Hubers went to Mid Central Educational Cooperative to get the family members' social security numbers. Sources tell KELOLAND News she discovered electronic files in Nicole Westerhuis' bag in the office and when she loaded them in the computer, she couldn't believe what she saw. But we don't know what was in those files.

She told people she turned them over to investigators.  KELOLAND News has confirmed with Attorney General Marty Jackley that Hubers is cooperating with investigators and has provided evidence, although Jackley says he cannot confirm exactly what that evidence was. 

Hubers was also given the keys to the Westerhuis property after investigators had cleared the site and KELOLAND News has been told that she spent time on the property. 

Investigators tell KELOLAND News they are aware of that.

Hubers is charged with taking thousands of dollars over a five-year period in payments from the Westerhuis' for keeping quiet about what they were doing with the grant money.

Governor's Office Statement:

“A number of department staff, including Secretary Schopp, had concerns that led to increased oversight and ultimately to termination of the GEAR UP contract. 
As to why they left - we do not comment on personnel actions,” Venhizen said.

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