Will South Dakota lawmakers hold hearings into the GEAR UP scandal?  That’s one of the issues lawmakers who oversee audits in the state dived into on Tuesday.  

The Government Operations and Audit Committee received the details of the special state audits that followed grant money through Mid Central Educational Cooperative.

KELOLAND’s Angela Kennecke first told you about the evidence of fraud, corruption and conflicts in those reports last month.

You’ll remember last month when the Auditor General’s special report into Mid Central Educational Cooperative and the millions in federal grant money that passed through it found that Mid Central’s board and its director seemed to have no idea what was going on with all that money.

As KELOLAND News has reported, at the criminal hearings for the three charged in the GEAR UP scandal, Mid Central’s long-time auditor testified there had been “red flags” for 8 years and that he met with two of those now charged, as well as Scott and Nicole Westerhuis about the problems, but never with the board. 

Getting audit reports before boards may be one of the changes that comes out of these latest hearings. 

“The Board of Mid Central did not take any corrective action, even after 8 years and this was 2014, even after 8 years of deficiencies noted,” Sen. Deb Peters said.

“So if I’m to understand it correctly, these audits indicated for 8 years,” Nelson said.

“At least 8 years,” Peters said.

“At least 8 years, which the department of education would have received in oversight of this and this continued on for this amount of time?” Nelson said.

“So if the audit findings did not discuss GEAR UP programs specifically, it would not have raised a red flag,” Peters said.

Sen. Nelson continued to push the issue about who is ultimately responsible for the fraudulent use of grant money in Platte.

“How did the South Dakota Department of Education drop the ball in such a monumental fashion on this?  Why weren’t they auditing or keeping closer track of this and how did this fall through the cracks for not several years, but many years?” Nelson said.

“We did note back in 2014 that the State was weak in their monitoring.  The compliance aspects may have been a little weak on those audits, I think some financial aspects were pretty good and some compliance areas might have been missed,” State Auditor Tim Flannery said.

Sen. Peters said she wants to move forward and add new rules when it comes to audits on what sub-recipients who get grant money; such as the American Indian Institute for Innovation, or AIII, did with GEAR UP funds from Mid Central. Peters wants such audits to be made public with a public review by the boards which oversee the programs.

“I think we do have a responsibility to our citizenry to ensure the people serving on the public boards are educated,” Peters said.

Peters also wants to tighten up any weakness in the waiver process and require performance reviews of grant programs by sub-recipients.  But she’s not in favor of putting people under oath, as Nelson has requested, to testify before GOAC.

“I think our definition of public hearing is just different. I am not opposed to public hearings. I think what we’ve done the last two meetings for Government Operations and Audit is bringing to light a conversation that has not yet happened with these audits and special report,” Peters said.

“It just defies logic that we have not, and especially in a committee that was designed for this, that we have not earmarked a specific time to have public hearings on this and get people on record as to how this was allowed to fester for over 8 years to the point it cost the life of a whole family here in South Dakota,” Nelson said.

Notably absent from Tuesday’s GOAC meeting was Secretary of Education Melody Schopp.

KELOLAND News was told GOAC is going to continue to discuss the audit and public hearings issue at its next meeting on July 24 in Pierre.  The Department of Education is expected to testify at that meeting.