After two years of our KELOLAND News investigation into GEAR UP, we now have evidence of when the first warning came over how the GEAR UP grant was being handled.

The South Dakota Department of Education is publicly releasing emails between members of the department and a former Director of Indian Education. 

The first of those emails warns Secretary Melody Schopp and other directors in the DOE about problems with grants being run through Mid Central Educational Cooperative and administered by Stacy Phelps. 

KELOLAND Investigates was the first to obtain the original email written by then-director of Indian Education, Luann Werdel, in 2011. 

Now Melody Schopp is releasing that email, along with follow-up apologies from Werdel for sending it in the first place.

But those apologies don’t mean the warning wasn’t true. 

Here’s a look at what that email contained:

LuAnn Werdel says she was asked to resign on Jan. 10, 2011 by Melody Schopp and then she wrote this email.

It says, “By ending my appointment as an exempt employee of the Department of Education you have effectively sided with people who have no integrity or morals when it comes to managing grants and federal funds. I have told you over and over what Stacy Phelps and Mid Central is doing with the GEAR UP grant and the College Access grant.”

Werdel points out the multiple roles Stacy Phelps held in the grants and goes onto say: 

“To conclude, you know only too well that I have been frustrated with the daily operations of the SD GEAR Up Grant and the SD College Access Grant.”

She claims the data for the College Access and GEAR UP Grant were being co-mingled by Stacy Phelps and says that is illegal.  Werdel also wrote that she showed the budgets to former Secretary of Education Tom Oster and Schopp and says they were “appalled.”  Then she asked, “What has changed?”

Wedel then goes on further about the mismanagement of the grants and Mid Central’s role in that.  She also questions Kelly Duncan’s role in all of it.  We’ve reported how the Dean at Northern State administered the College Access grant, while holding contracts with the state and sitting on the board of education.

Werdel wrote in her email:

“Dr. Kelly Duncan’s role in College Access, besides being ill-defined, raises a variety of ethical considerations,” 

Secretary Schopp, while not under oath, told the Government Operations and Audit Committee last month that no action was taken by her department to monitor the GEAR UP grant after getting that email from Werdel.

“Senator, again we don’t make determinations based on hearsay; we’re not the DCI. We had no proof of any of that. We made our determination on fact, not on hearsay,” Sec. Schopp told GOAC on July 24.

But Schopp did tell GOAC this:

“I think the perception is we did nothing until we had the DOE audit and then came back before GOAC. That is truly not the case. Started monitoring in April of 2012,” Sec. Schopp told GOAC on July 24.

And that was 14-months after Werdel was forced to resign.

But Schopp also released emails written by Werdel the following day, apologizing for sending that original email.  Werdel said she was under stress due to personal reasons, but never retracted her accusations. 

Werdel later wrote an email to Schopp saying: “students are the ones who will lose out if any programs are embarrassed.”

Werdel also wrote an email to the Department of Education expressing confidence in Dan Guericke and Stacy Phelps to run a different grant program. 

Schopp tells a legislative committee in a written statement it was obvious Werdel was “distraught” and was “lashing out.”


Werdel was not available for an on-camera interview, but tells KELOLAND News she apologized because she should have talked to Schopp in person, instead of sending an angry email to several people, after getting fired. Werdel tells me her original warning was factual and wishes the DOE would have provided more oversight at the time.

Meanwhile, Schopp and Department of Education Finance Director Tamara Darnall are saying they will not testify before the Government Operations and Audit Committee next week.  They did answer some questions on paper.  Auditor Randy Schoenfish also answered questions on paper, but will not appear and GEAR UP evaluator Brinda Kuhn has also turned down the invitation. Since GOAC invited, instead of summoned, all of these people to answer questions over GEAR UP, they are not required to appear.