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Report: Weaknesses In SD Econ. Dev. Policies

February 13, 2014, 12:34 PM by Ben Dunsmoor

Report: Weaknesses In SD Econ. Dev. Policies
Richard Benda

PIERRE, SD -

The third and final audit ordered by South Dakota Governor Dennis Daugaard following allegations of misconduct in the state economic development office was released Thursday.

The report from the South Dakota Department of Legislative Audit found that former Secretary of Tourism and State Development Richard Benda increased two Future Fund grants by a total of $600,000 for Northern Beef Packers just a month before he left office. The changes came in December 2010, shortly before Benda went to work as a loan monitor for NBP in Aberdeen.

However, the report does say the $600,000 never made it to Aberdeen because $850,000 was eventually returned to the Future Fund in February 2011, after the South Dakota Development Corporation decided NBP did not need the extra money.

The report was ordered in November after it was discovered that Benda inappropriately redirected $550,000 in grant money for his own loan monitoring; it was intended to pay for construction costs of the NBP plant. Benda committed suicide in October.

The Department of Legislative Audit says that transaction was between the South Dakota Regional Center and NBP, two private entities, so it was not within the scope of the audit that was just completed.

What the report did find is that there were gaps in policies that allowed for the transactions. 

“We do report a material weakness in policies and procedures concerning potential conflict of interest,” Auditor General Martin L. Guindon wrote in the report.

Benda did discuss an employment contract with SDRC Inc. in December 2011 while he was still working for the Department of Tourism and State Development, which was currently working with the department on the NBP project.

Daugaard said Thursday he is pleased that the audit found no other wrongdoing outside of the concerns surrounding Benda which were uncovered by the Attorney General last fall.

The legislature is planning to hold hearings on the investigations and allegations now that the audits are complete.

Click here to read the report.

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