LAKE ANDES, S.D. - An auditor that reviewed the financial records of a beleaguered education cooperative said Wednesday that stolen money may have been funneled between multiple nonprofits.
Between 2008 and 2014, American Indian Institute for Innovation, along with Oceti Sakowin Education Consortium, owed Mid Central Education Cooperative between $300,000 and $400,000. Both were non-profit organizations belonging to Scott Westerhuis that got GEAR UP grant money. In court papers, Mid Central says $5 million was either missing or stolen.
Schoenfish told MCEC needed better accounting practices. Solution was to put Nicole Westerhuis more responsibility. #kelonews— Angela Kennecke (@AngelaKennecke) March 15, 2017
Auditor Randy Schoenfish, of Schoenfish & Company, said in his testimony that those figures raised a red flag and that he called for meetings with Mid Central Director Dan Guericke and both Scott and his wife Nicole Westerhuis, as well as Assistant Business Manager Stephanie Hubers. He told the court that he saw Mid Central was bankrolling OSEC and AIII.
Timeline: Information From KELOLAND News GEAR UP Investigation
According to testimony from South Dakota Attorney General Marty Jackley, Hubers maintained a set of "secret books" to hide actual balances from the organization's board and its auditors.
Schoenfish, who’d been conducting audits for Mid Central for more than 20 years, said "Mid Central always had some sort of explanation." He also performed single audits on the grants that the organization received as required by law, including the GEAR UP grant.
While it did sometimes find issues, Schoenfish says that is not usual in any audit. He testified that the Westerhuises were not stealing directly from Mid Central, but may have been embezzling money from AIII or OSEC.
Mid Central administrative assistant Katrina Brown, one of the first witnesses on Wednesday, said she received a raise after Scott Westerhuis told her that extra money would come from AIII. But according to testimony, those payments stopped in Fall 2014.
Brown says she questioned Guericke about extra duties she had taken on, but he told her that he didn't know why Westerhuis was asking her to do the extra work. In court, she also called Westerhuis a "control freak" and a "bully."