The South Dakota Department of Legislative Audit has found 'material weaknesses' in conflict of interest policies and documentation of expenses in the state economic development office.
It's the main finding in the final audit that was ordered by South Dakota Governor Dennis Daugaard following allegations of misconduct in the office during the previous administration.
Since late October when former South Dakota Tourism and State Development Secretary Richard Benda committed suicide, new details about his actions in the state economic development office have been revealed.
"He took a lot of leeway," Representative Anne Hajek (R) Sioux Falls said.
The audit says that Benda increased a grant from the state by $600,000 for Northern Beef Packers in Aberdeen just a month before he left office to go work the South Dakota Regional Center which was working with NBP on the beef plant.
"To hand over that kind of money or have the freedom with that kind of money in one individual. There will always be bad actors," Hajek said.
The report says the extra money never made it to the plant but the transaction does raise concerns about conflict of interest between state employees like Benda who was talking with SDRC Inc. about a job during his final weeks in office.
"It absolutely is concerning. I think when it comes to taxpayer money and taxpayer dollars and the way that's being spent we need to make sure we have the proper checks and balances in place and obviously in this case some part of the system broke down," Representative Paula Hawks (D) Hartford said.
Now that the final audit has been released the legislature's Government Operations and Audit Committee will hold hearings regarding the economic development office. The committee will submit its final report on December 1.
Lawmakers are confident that report along with the audits will give them the answers they're looking for.
"I think we can feel satisfied that what we need to know will be found out," Hawks said.
The Governor's Office of Economic Development now has a conflict of interest policy and is making changes following the audits.