Tag Archives: GOAC

The GOAC meeting on Tues, April 25, is one to keep an eye on!

Non-meandered lakes will be THE topic to keep an eye on!

On Tuesday, April 25, the legislative Government Operations & Audit Committee (GOAC) will meet in Pierre for its second meeting of the year. This is a meeting worth keeping an eye on for many reasons; I’ll go into some of those reasons as I list the agenda items below. Due to this meeting have so many big-ticket topic I plan to be in Pierre on Tuesday in order to record a video of the proceedings. Hopefully that will allow more people to see what GOAC does or doesn’t do.

The previous GOAC meeting was held on March 28 in Pierre. The minutes from that meeting can be read here.

The agenda for the upcoming April 25 meeting can be viewed here.  For this post I will briefly list each agenda items. Additionally I will add some notes pertaining to each agenda item.

Item 1 – Department of Legislative Audit to review the Single Audit Report for the State of South Dakota for the fiscal year ended June 30, 2016

This agenda item has the two following documents posted online:

I haven’t had a chance to actually browse through either file yet.

Item 2 – Brand Board to review the 2016 annual report

The two documents available for this agenda item are:

Over the last few years I’ve learned the branding board is VERY important to ranchers. Cattle stealing still happens and the Brand Board is one tool used to keep rustling under control.

Item 3 – Department of Human Services, Division of Rehabilitation Services to discuss Federal Communication Commission Direct Video Calling

For this agenda item the Department of Human Services (DHS) will give a presentation on Telecommunication Relay Services (TRS). The documents available for this meeting are:

Item 4 – Department of Game, Fish and Parks to discuss the discontinued access to non-meandering waters in South Dakota

Now we are up to what I think will be one of the, if not the, biggest item of the 2018 legislative session: non-meandered waters! This is a top that pits sportsmen against landowners against GFP. It is a topic I will spend more time blogging about this summer, so I will keep this particular blurb short. But I will say this is a topic everyone should be paying attention to. GFP’s move to close access to certain non-meandered lakes after a recent SD Supreme Court decision is getting a lot of attention. My next blog about this topic will be going over some of terminology and history around the topic.

Item 5 – Auditor General to provide an update on the Mid Central Educational Cooperative Special Review Report and the fiscal year 2015 Single Audit – final report to be reviewed at a future GOAC meeting

This is an ongoing issue and will continue to be HUGE. A lot of pressure is being placed on GOAC to find out everything about the GEAR-UP scandals, especially with MCEC. Recently Sen Stace Nelson (R, Dist 19) called out Rep Kyle Schoenfish (R, Dist 19)  for his firms part in auditing certain entities involved in these scandals. That will likely come up during the meeting as well. Unfortunately the Auditor General has not posted a copy of the audit update. People are demanding answers and hopefully this meeting will start to provide some of them.

Item 6 – Bureau of Human Resources to discuss:
• The length of time needed between the employment application and
the job offer
• Performance management indicators

I haven’t really looked into this agenda item….

Item 7 – Future meeting topics:

Finally, here is a list of what GOAC hopes to accomplish later in the year:

  • Juvenile Corrections Reports
  • Review the Mid Central Educational Cooperative Special Review Report
  • Department of Revenue review of performance indicators
  • Bureau of Information and Telecommunications review of performance indicators
  • University Centers financial review
  • Board of Regents application and acceptance process
  • Annual report from the Obligation Recovery Center
  • Annual reports from agencies receiving funds from the Building South Dakota Fund
  • Report from Bureau of Human Resources on compiled authorizations to derive a direct benefit from a contract
  • Report from the Auditor General on compiled authorizations to derive a direct benefit from a contract
  • Annual report from the South Dakota 911 Coordination Board
  • Review the annual work plan and report of the State Board of Internal Control
  • Annual report from the South Dakota High School Activities Association

Many of those topics will likely be blog-worthy. And all of the topics are worth keeping an eye on!

Full agenda for the GOAC meeting on Tues Oct 18

33372582On Tuesday, October 17, the Government Operations and Audit Committee (GOAC) will have its fourth meeting of the 2016 interim session. The meeting will begin at 9:00 AM CT in Room 413 of the State Capitol Building. The previous meeting was held on August 23. My post prior to that meeting can be viewed here, and the minutes from that meeting can be viewed hereSDPB will provide live audio for anyone wishing to listen in on the meeting, an archive of the audio will also be available there after the meeting.

This meeting has a full agenda. Here is a brief overview of what is on the agenda:

Item 1 – Department of Transportation to provide an update on the completion of the railroad maintenance agreement by Dakota Southern Railway Company

I haven’t really followed rail maintenance items, so have no comments on this agenda item.

Item 2 – Bureau of Human Resources to discuss health care impacts relating to Sanford Health’s announcement that they are leaving Dakotacare and Avera Health medical plans

This move from Sanford made pretty big news in a South Dakota a couple of months ago. Here is an excerpt from a KELO story:

The company says Avera’s DakotaCare wanted to maintain broad network products that include Sanford providers, but denied Sanford Health Plan the same ability to offer broad-network products that include Avera providers.

Item 3 – Bureau of Administration to provide an update on the Obligation Recovery Center

Since I have been following the happenings with the Obligation Recovery Center (ORC) pretty closely I will be paying extra attention to this agenda item; but I don’t really expect anything of value to come out of this meeting. The documents for this meeting includes the yearly ORC report. There really isn’t anything new to read from this report because it is for Fiscal Year 2016, which ended before the ORC was actually operational.

Item 4 – Attorney General Jackley to discuss civil and criminal implications associated with the recently passed legislation regarding conflicts of interest

This is an interesting agenda item. Back in April I looked at Jackley and the new conflicts of interest legislation. It should be interesting to see what Jackley has to say now; especially since it is a topic he might run on for Governor in 2018.

Item 5 – Bureau of Finance and Management to provide an update on progress made by the Internal Control Board

Back in July I looked closer at the Board of Internal Controls (BIC). I think more attention needs to be placed on this particular board. I’ve spoken with legislators that believe the board they signed into law only creates code of conduct and conflict of interest policies. But that doesn’t seem to be the cased, it appears to be so much more. Actually I think Appropriations may be trying to implement a LEAN audit on BIT that could possibly be a doubling of effort for what the BIC is aimed to do.  This particular agenda item may be worth paying attention to in order to get an idea if the BIC is doing what the legislature actually believes they passed into law.

Item 6 – Governor’s Office of Economic Development – Annual report of activity relating to the Building South Dakota Fund

This of course is the special slush fund the Governor’s Office has to spend money on economic development. This is an area I wish the legislature would end altogether…

Item 7 – Human Services Center to provide an update on the operations of the facility

The Human Services Center in Yankton is the spotlight of this agenda item. I won’t go into detail here, because of an upcoming post on the topic.

Item 8 – Department of Legislative Audit to discuss the FY16 GOAC Blue Book and determine if the Committee has in interest in reviewing further any particular fund

 

GOAC meeting on Tues Aug 23

33372582On Tuesday, August 23, the Government Operations and Audit Committee (GOAC) will have its third meeting of the 2016 interim session. The meeting will begin at 9:00 AM CT in Room 413 of the State Capitol Building. The previous meeting was held on June 20. My post prior to that meeting can be viewed here, and the minutes from that meeting can be viewed here. There are future posts that will come out of that meeting which I am currently working on as part of another story, stay tuned.

The agenda for the August meeting can be viewed hereSDPB will also provide live audio for anyone wishing to listen in on the meeting.

There are eight agenda items to look at. In this post I will look very briefly at each item (I separated the ACJ in my right shoulder, have to keep my posts short for a few days):

Item 1

Department of Legislative Audit to review the calendar year 2015 audit reports of the:

  • South Dakota Authority Captive Insurance Company – Audit Report
  • South Dakota Property and Casualty Captive Insurance Company – Audit Report

The two above captive insurance companies were created by the legislature in 2015 via  HB 1185 (SoDakLiberty Posts), HB 1186 (SoDakLiberty Posts), and HB 1187 (SoDakLiberty Posts). This is to cover the great amount of assets the state owns, but has remained uninsured for all these decade.

Item 2

Follow-up information on the South Dakota Developmental Center

The SDDP was a huge focus of the previous meeting. There were unanswered questions. Personally I think there are even more questions that have yet to be asked. Perhaps that will be a future post!

Item 3

Technical Institutions of South Dakota – to discuss:

  • Student numbers
  • Programs
  • Economic impacts facing the schools
  • Salary enhancements

The Tech School instructors will also receive a pay raise this year thanks to an amendment from Rep Roger Solum (R, Dist 5) to the sales tax increase of 2016 via HB 1182 (SoDakLiberty Posts). Apparently that will be a focus for GOAC in this meeting.

Item 4

University Center in Sioux Falls to provide an update on the center

Item 5

Department of Revenue to provide an update on recently passed
legislation pertaining to the direct shipment of wine

During the 2015 legislative session HB 1001 (SoDakLiberty Posts) was passed into law. HB 1001 allowed the direct shipment of certain wines in South Dakota.

Item 6

Bureau of Human Resources to present the annual report of compiled authorizations in accordance with SDCL 5-18A-17.2. The Auditor General will provide an update on conflict waiver forms received.

Item 7

The Building South Dakota Fund annual reports from:

  • South Dakota Department of Education
  • South Dakota Housing Development Authority

Item 8

Department of Transportation to provide an update on the collection and use of additional taxes and fees raised by Senate Bill 1, 2015 Session

The SB 1 (SoDakLiberty Posts) in question is the massive tax and fee increase from 2015 to pay for roads and bridges.

Obligation Recovery Center to go live on July 15

22475082The South Dakota Bureau of Administration (BOA) has announced the State’s new Obligation Recovery Center (ORC) will go live on July 15, 2016. I have blogged about the ORC quite often. The ORC is the new state collection agency created by the legislature in 2015 via HB 1228 (SoDakLiberty Posts).

BOA’s press release notes CGI Technologies and Solutions, Inc. will operate the center on the states behalf. Back in November of 2015 the contract was awarded to CGI. Here are three posts I had about that contract:

I recently blogged about ORC updates from the May  Government Operations and Audit Committee (GOAC) meeting. At that time it was noted the new center would begin collections on July 15. I also noted this was well behind schedule, as the South Dakota Unified Judicial System (UJS) fines and restitutions were originally scheduled to be collected starting on April 15, 2016; and not July 15. Actually according to the original schedule the Board of Regents and Department of Labor and Regulation should have been fully implemented alongside the UJS by this time.  That is why I found this portion of the press release odd:

The contract was awarded on Nov. 15, 2015, and work began immediately. The seven-month project is on track and everything is in place and ready for state agencies to begin the process.

I’m not sure I would count three months behind as “on track”.

The press release notes that one of the three third-party collection companies hired by CGI does have some sort of SD connection:

In addition, an RFP was issued and contracts have been signed to hire three third-party collection companies, including Progressive with offices in Aberdeen, S.D., to work with CGI to collect state debt.

I believe that was aimed at legislators that think the private collections industry that already exists in South Dakota should be tapped to collect debt on behalf of the state.

The main thing to watch for is how the ORC handles its power to take away and prohibit vehicle registrations, licenses and permits. I took a look at the ORC policy regarding this in a previous post.  Here are the types of licenses and permits the ORC can have withheld from people who owe the state money:

  • Department of Game, Fish and Parks (GPS): hunting license, fishing license, state park permit, or camping permit
  • Department of Revenue, Division of Motor Vehicles (DMV): motor vehicle, motorcycle, or boat
  • Department of Public Safety (DPS): driver license

And here is the criteria that must be met to withhold those:

  • The debt must have been held by the ORC for at least 60 days (so it is not instantaneous).
  • The ORC must have made at least 3 attempts to contact the debtor.
  • The ORC does not have a payment plan with the debtor, or the debtor has not followed a payment plan. (so a payment plan can stop this action).
  • For the GPS licenses to be withheld the debt owed must be $50 or greater. For DMV and DPS licenses to withheld the debt owed must be $1,000 or more

As the ORC is implemented I plan to watch closely to see what happens. Personally I don’t think the ORC will have any positive impact on SD revenues (or that a new quasi-state-agency is needed to go after SD citizens). The first group up for collections is UJS fines and restitutions; a group of people who are already facing possible court complications after not paying their fine or restitution.

2 meetings completed for the new Board of Internal Control

14849751During the 2016 legislative session the Government Operations and Audit Committee (GOAC) sponsored  SB 162 (SoDakLiberty Posts) on behalf of the Governor’s Office. This bill basically creates a new Board of Internal Control (BIC). I looked briefly at the makeup of this board when the actual appointments to the board were made. Since that time the board has had two meetings. The meeting agendas, minutes, audio files and other documents can be found on the SD Boards and Commissions website.  In this post I will look at the basic goal of the board and some brief takeaways from the first two meetings.

Activities of the Board of Internal Control

Here is what the BICs website has to say its activities include:

The board shall establish and maintain:
1. Guidelines for an effective system of internal control to be implemented by state agencies that is in accordance with internal control standards;
2. A code of conduct for use by state agencies;
3. A conflict of interest policy for use by state agencies.
The board shall create an annual work plan and report to be presented to both the Governor and to the Government Operations and Audit Committee.

Basically this should, if implemented properly, translate to more efficiency and transparency in state agencies. For the first twelve months the board has to meet monthly. Then the board has to meet at least quarterly. Two of those mandatory meetings have already taken place.

What is Internal Control

During the first meeting Keith Senger, Bureau of Finance and Management (BFM) Director of Accounting and Financial Reporting, gave a presentation explaining what Internal Control actually is. The presentation can be viewed here, or the minutes from the meeting has basically the same information.

The slides presented by Senger are worth looking at. But for a good single-paragraph definition of Internal Control I will refer to BusinessDictionary.com:

Systematic measures (such as reviews, checks and balances, methods and procedures) instituted by an organization to (1) conduct its business in an orderly and efficient manner, (2) safeguard its assets and resources, (3) deter and detect errors, fraud, and theft, (4) ensure accuracy and completeness of its accounting data, (5) produce reliable and timely financial and management information, and (6) ensure adherence to its policies and plans.

Senger also noted that Internal Control is not just about accounting. Instead of just accounting, Senger notes just a few areas of state government that are covered:

  • Budgeting
  • Building roads and bridges
  • Correctional faculty operation
  • Education
  • EVERYTHING and Accounting

Senger’s presentation goes on to say that “Internal Control is everything an entity does to help achieve its objectives”. So basically Internal Controls should allow state agencies to be more efficient, transparent, and possibly add some consistency between departments.

Skipping ahead, Senger notes that implementing Internal Control is time-consuming and costly. It will take years to fully  develop, implement, and document a good Internal Control system. It also takes a lot of resources such as staffing and technology. Anyone watching the Board of Internal Control and expecting rapid results will be very disappointed.

Senger notes one of the things the Board of Internal Control must do right away is develop a Statewide Code of Conduct and a
Conflict of Interest policy. There were minor steps taken legislatively through  HB 1064 (SoDakLiberty Posts) in 2015 and HB 1214 (SoDakLiberty Posts) in 2016. But these are simply conflict of interest penalties, and not a true conflict of interest policy. BFM did provide presentations about what should be considered when creating a Code of Conduct and a Conflict of Interest .

The committee did work on the Code of Conduct and a Conflict of Interest in the second meeting, but I don’t see them posted in the documents section.

Federal grant compliance is a driver for the new Board of Internal Control

Looking at the minutes from the second meeting and a presentation on Pass-through Entity and Subrecipients it is noted that “The State has widespread non-compliance with areas of the Uniform Grant Guidance”. This is listed as an area of “concern” for the governor that drove him to push for Internal Controls. It was noted that federal grants made after December 26, 2013 are supposed to follow the Uniform Grant Guidance; a one document “super circular”. More information about the Uniform Guidance can be found on CFO.gov (this topic is too big for this little post). It would appear the state has to do a better job handling the federal grants it receives or passes on to other organizations. The state wouldn’t want to miss out on any federal dollars…

Going forward

There was more to both meetings. But I think the above gives at least a general idea of what this board is doing and will be doing for a number of years. The second meeting had audio available; so hopefully future meetings will have both live audio and archived audio for those wishing to follow this board.

GOAC meeting on Mon June 20, SDDC operations discussion and tour

On Monday, June 20, the Government Operations and Audit Committee (GOAC) will have its second meeting of the 2016 interim session. This particular meeting will be held at the South Dakota Developmental Center (SDDC) in Redfield. The previous meeting was held on May 17. My post prior to that meeting can be viewed here, and the minutes from that meeting can be viewed here.

The agenda for this meeting can be viewed hereSDPB will also provide live audio for anyone wishing to listen in on the meeting.

ORC update from previous meeting

An update on the Obligation Recovery Center (ORC) was a topic of interest from the previous meeting. Coming out of that meeting I have a post about the ORC update  and a post about the debt collection policy. The implementation of the ORC will continue to be a top issue for this blog.

SDDC tour and discussion of operations

South Dakota Developmental Center in Redfield. Photo by Ken Santema 02/05/16.
South Dakota Developmental Center in Redfield. Photo by Ken Santema 02/05/16.

On the agenda is a tour of the South Dakota Developmental Center (SDDC) and then a discussion with the Department of Human Services (DHS) about SDDC operations.

The SDDC was the subject of a couple of bills in the 2016 legislative session. HB 1208 (SoDakLiberty Posts) was signed into law and would allow the state to sell land currently in the control of the SDDC. This includes possibly selling land that buildings slated to be demolished are located on. The sale of that land will be used for the SDDC.

There was a second bill, HB 1015 (SoDakLiberty Posts), to demolish certain buildings on the SDDC campus. But that bill was killed and paying for the building demolition was included in an amendment to HB 1208.

The SDDC campus is of particular interest to me as I am working on a separate project about some “patients” that resided on this campus during a darker era of South Dakota healthcare.

DHS discussion of LifeScape

The LifeScape program has been under investigation due to possible victimization and preventable deaths.

Here is how the LifeScape website describes the organization:

LifeScape formed in mid-2014 when Children’s Care Hospital & School and South Dakota Achieve joined together. We are an independent, non-profit organization, serving adults and children in Sioux Falls, South Dakota.  Our center in Rapid City provides therapy and psychological services for children on an outpatient and outreach basis.

This might be worth checking out for anyone that has had any dealings with LifeScape.

Other agenda items

Also on the agenda is the following items:

  • Item 4 – Department of Social Services to discuss the licensing procedures for outside juvenile placement facilities
  • Item 5 – Department of Transportation and the South Dakota State Railroad Board to discuss the operations of the State owned rail line leased to Dakota Southern Railway Company

Both of these items are worthy of further scrutiny.

GOAC meeting today at 9am

33372582Today at 9:00 am the Government Operations and Audit Committee (GOAC) will meet in Pierre for their first meeting of the 2016 SD legislative interim session. This is a meeting I will be reporting on later in the month because of the topics involved.

The agenda for the meeting can be viewed here. All of the documents prepared for this meeting can be viewed hereSDPB will also provide live audio for anyone wishing to listen in on the meeting.

Here is a brief overview of the agenda items for this meeting. Due to time constraints remodeling my house for a high school graduation this post will be kept short.

  1. Juvenile Corrections Monitor Semi-Annual Report for the period July 1, 2015 through December 31, 2015.
    The closing of the STAR juvenile academy and the death of Brady Folkens is a topic I am currently working on for later this summer. This report could be important for those issues.
  2. Department of Corrections – Report on Abuse and Neglect in Private Placement Facilities for the period July 1, 2015 through December 31, 2015
    This may have bearing on the first agenda item.
  3. Obligation Recovery Center – To provide an update on the program created by HB1228, 2015 Session
    The Obligation Recovery Center (ORC) is a topic I have been following. There has been very little information available about its implementation, even though it technically is supposed to be at least partially functional at this time. This was created in 2015 via HB 1228 (SoDakLiberty Posts).
  4. Department of Legislative Audit to review the Single Audit Report for the fiscal year ended June 30, 2015
    The Single Audit Overview can be viewed here.  Its purpose is:

    A single audit is an audit which includes both the entity’s financial statements and its federal awards. The State’s single audit includes an examination of the financial records, internal controls and compliance with laws and regulations for both the federal programs and the State as a whole. The audit of the State’s financial statements is designed to determine whether the statements are fairly presented in all material respects; and whether the presentation is in accordance with generally accepted accounting principles (GAAP).

  5. Bureau of Human Resources and the Board of Regents to discuss procedures for identifying and processing conflicts in the area of State contracts

    With the many conflicts of interest being found in higher education money it is no surprise the Board of Regents would be working on this.

  6. Brand Board to review the 2015 annual report
    There always seems to be at least a couple of bills that come up each year in regards to branding…
  7. Department of Social Services to discuss the closure of the Adolescent Inpatient Program at the Human Services Center in Yankton
    I’m gonna have to look into this one…
  8. Future topics: South Dakota Developmental Center
    The South Dakota Developmental Center (SDDC) is another summer project of mine.

House State Affairs has 6 bills on Mon Mar 7, eliminate life sentences for teens

On Mond9764076ay, March 7, at 7:45 am the SD House State Affairs committee will take on 6 bills. This is compiled using the agenda at the time of composing this post. Agendas can and do change!

One way to listen to these meetings live is via the audio links on the Schedule page of the LRC website. While there you can also view the status board for the meetings as they are going on.

SB 140 (SoDakLiberty Posts) – Eliminate life sentences for defendants under the age of eighteen at the time of the crime.

SoDakLiberty Stance: Support
Prime Sponsors: Sen Craig Tieszen (R, Dist 34) and Rep Timothy Johns (R, Dist 31) are the prime sponsors.

This bill basically eliminates life sentences for juveniles. Apparently in South Dakota an inmate is not eligible for parole if no terms of years is sentenced. This bill forces a term of years to be set when sentenced. It doesn’t set an actual number that must be followed, just that a term of years is set. With a number of years set it is then possible at some later date to go before a parole board.

Miller v. Alabama was seen before the Supreme Court of the United States (SCOTUS). Here is a summary of the conclusion from that case via Oyez:

Yes. Writing for a 5-4 majority, Justice Elena Kagan reversed the Arkansas and Alabama Supreme Courts’ decisions and remanded. The Court held that the Eighth Amendment’s prohibition against cruel and unusual punishment forbids the mandatory sentencing of life in prison without the possibility of parole for juvenile homicide offenders. Children are constitutionally different from adults for sentencing purposes. While a mandatory life sentence for adults does not violate the Eighth Amendment, such a sentence would be an unconstitutionally disproportionate punishment for children.

I think this was a good decision. The mind of a child or adolescent is very different from that of an adult.

This change in law would not necessarily mean such a person won’t spend their whole life in prison. It just recognizes the fact that someone who did something horrible as a teenager can possibly change much later in their life.

It was amended by Senate Judiciary to remove “without parole”. Technically when a someone is sentenced by a judge with no actual terms of years this is the same as without parole in SD.

SB 143 (SoDakLiberty Posts) – Require the Legislative Planning Committee to implement a performance management review process.

SoDakLiberty Stance: Undecided
Prime Sponsors: Sen Mike Vehle (R, Dist 20) and Rep Scott Munsterman (R, Dist 7) are the prime sponsors.

I still haven’t looked into this bill. I really need to! It passed the Senate floor

SB 162 (SoDakLiberty Posts) – Create the State Board of Internal Control and to declare an emergency.

SoDakLiberty Stance: Undecided
Prime Sponsors: The Committee on Government Operations and Audit is the prime sponsor at the request of the Office of the Governor.

This is being brought forth by the Governor’s office. This bill deals with financial controls in State Government. This board would look at the internal and external controls in place for financial transactions if I understand this correctly. In particular this board would monitor how the state handles federal dollars (such as grants) and the recipients of those grants from the state. This would possibly have prevented a GEAR UP situation.

I hope to attend this committee meeting and learn first-hand about this bill.

SB 124 (SoDakLiberty Posts) – Enhance South Dakota.

SoDakLiberty Stance: Opposed
Prime Sponsors: Sen Jim White (R, Dist 22) and Rep Steve Westra (R, Dist 13) are the prime sponsors.

This is a hoghouse vehicle bill with no actual content. I hate it when these bills are passed. An empty bill should never be passed. This is just like signing a blank check. There are other procedural moves that can be done later if a new bill is needed.

SB 125 (SoDakLiberty Posts) – Accommodate legislation relating to education in South Dakota.

SoDakLiberty Stance: Opposed
Prime Sponsors: Sen Jim White (R, Dist 22) and Rep Steve Westra (R, Dist 13) are the prime sponsors.

This is a hoghouse vehicle bill with no actual content. I hate it when these bills are passed. An empty bill should never be passed. This is just like signing a blank check. There are other procedural moves that can be done later if a new bill is needed.

SB 126 (SoDakLiberty Posts) – Accommodate legislation on medical services.

SoDakLiberty Stance: Opposed
Prime Sponsors: Sen Jim White (R, Dist 22) and Rep Steve Westra (R, Dist 13) are the prime sponsors.

 This is a hoghouse vehicle bill with no actual content. I hate it when these bills are passed. An empty bill should never be passed. This is just like signing a blank check. There are other procedural moves that can be done later if a new bill is needed.

An interesting audit of the SOS office from the Gant years

Tomorrow, October 30, the South Dakota legislatures Government Operations & Audit Committee (GOAC) will meet at 9 am in Pierre. dreamstime_s_22701227I’ve done a post looking very briefly at all agenda items but one.  That one agenda item is the audit that was performed of certain areas of the Secretary of State (SOS) office. This post will look at that agenda item.

Before I continue this post  I want to say two things. First, I hoped to never have to mention former Secretary of State Jason Gant on this blog again. And second, I’ve heard many say that all these “inconsistencies” that come up with Gant are a case of current SOS Shantel Krebs throwing Gant under the bus? I don’t see any of these as cases of Krebs throwing Gant under the bus; rather it is how transparency in government is supposed to work. If an elected official, or their office, does anything questionable or acts inept it should be discovered and brought to the public’s attention!

The GOAC meeting agenda item in question is number 8. It is the audit completed for “certain accounting records and processes at the Secretary of State’s Office at December 31, 2014”. The document can be viewed here. December 31, 2014, is important because it would have been the end of Gant’s last year in office (although he had actually been working from Sioux Falls for months at that time).

There were seven sections of the document. Here is a summary of what I found important from each section:

Section 1 – Inconsistencies with PAD account.

The SOS office has prepaid account deposit (PAD) accounts to receive money from entities that frequently use the offices services. The SOS office shows these PAD accounts have a balance of $289,287.47 as of Dec. 31, 2014. That amount should reconcile the cash balance in the local bank account and the PAD accounts reported on the states accounted system; those two together equal $254,970.63. That leaves a difference of $43,307.84. The audit notes there “was no evidence of reconciliation explaining the $43,307.84 difference”.

This definitely needs to be looked into further. Is this a case of Gant’s office once again being inept and failing to keep the books updated. Or is it a case of money going somewhere it shouldn’t…

Section 2 – Original State flag missing

This particular item has caused a bit of news. It was determined the original State flag was missing. The flag has been found by the AG’s office and criminal charges are forthcoming. Apparently  a former SOS employee living in DC has the flag. Another case of the Gant office not living up to the standards expected by the public.

Section 3 – Missing iPad minis

Three of thirty iPad minis were found missing on January 2, 2015. Not only would I question why there are three missing iPad’s, but I would also question why the office needed that many. Although perhaps they are used to help County Auditors during election season. It would be interesting to hear what Gant has to say.

Section 4 – Adequate budget to finish FY2015, but there are unexpected items impacting the budget.

The audit found the SOS office has stayed within budget and is on track to do so at the end of FY2015. Yet there are three unexpected items which are having an impact on the SOS FY2015 budget:

  1. The 2013 legislative manual (Blue Book) that is normally printed every odd year was not available until December 2014 (a year and a half late). The Blue Book was not only published late, but a different publisher was chosen. That caused the 2013 Blue Book to fall in the FY2015 year, instead of FY2013 or FY2014. The blue book published was $16,360 for FY2015. Worse yet, the original publisher “filed a claim of $28,512.93 plus accrued interest in damages in April 2015.” Gant just keeps costing the state money. Not only did Gant’s office fall behind by a year and half publishing the Blue Book, it was done in a way that costs the taxpayers thousands of extra dollars. Additionally it placed an unexpected expense on the new SOS.
  2. An election history book was contracted during FY2014, with most of the cost occurring in FY2015. Actually when I go to the SOS office later this fall I want to see the election history book. I think it is an interesting topic for a book, but should that have been an undertaking of the SOS office?
  3. In 2014 Corporate documents were removed from online websites by the SD Bureau of Information Technology (BIT) because some documents had personally identifiable information. Redacting these documents and getting them back online in the proper fashion will take time and money from the SOS office. One more case where the Gant office should have been paying attention to what was going on.

Section 5 – Payroll is fine!

Good news! No exceptions were found in the operating and payroll expenditure transactions. Gant did good paying his bills and employees!

Section 6 – HAVA and FVAP issues

A review of the Help America Vote Act (HAVA) grant and the Electronic Absentee Systems for Elections – Federal Voting Assistance Program (FVAP) expenditures for the Gant years. It is not suprising to see HAVA have some issues with the Gant administration. Previously I‘ve blogged about how the Gant administration spent over half a million dollars to implement a system that is less functional than the existing hundred thousand dollar system.

Here are the inconsistencies found in this area for the Gant years:

  1. HAVA sub-grants were given out to SD counties totaling $110,495. The invoices for these sub-grants were not kept, so they could not be properly audited. That means it cannot be verified the sub-grant money was allocated according to the defined process.
  2. A cloud storage device was being paid for purely by HAVA grant funds even though the device was also used for Division of Business Services purposes. Any money used for Division of Business Services cannot utilize HAVA grant funds. This is an other area the Gant office failed to retain documentation, therefore it is not possible to show HAVA grant money is being spent properly.
  3. HAVA grant was also used to pay for oversight of the FVAP grant. The audit finds that use of HAVA funds is now allowable.

It almost appears at this time that the Gant office used the HAVA funds without actually understanding the restrictions tied to the grant. Actually this document even says the following:

The Secretary of State’s Office did not have adequate internal control policies or procedures with regards to HAVA and FVAP management.

That is just dealing with one small, but important, function when dealing with elections. How many other areas of the SOS office were left without internal control policies or procedures during the Gant years?

Section 7 – Remaining HAVA funds fine!

No exceptions were found for the remaining allocated balances of HAVA funds available to SD counties!

A full agenda for the Government Operations & Audit Committee (GOAC) meeting on Oct 30

SD State Capital. Photo by Ken Santema.
SD State Capital. Photo by Ken Santema.

On Friday, October 30, the South Dakota legislatures Government Operations & Audit Committee (GOAC) will meet at 9 am in Pierre. Of particular interest in this meeting is the report from the Secretary of State (SOS), which is towards the end of the agenda. I am going to look at the SOS portion of this meeting in a separate post!

Here is a brief breakdown of all ten items on GOAC’s agenda. Most of these are items I’ll refrain from digging into so I can spend more time on the SOS portion of the meeting (that post will be separate!).

Item 1 – Oversight Council – To provide the annual report called for in the Public Safety Improvement Act

Public Safety Improvement Act (PSIA) was passed by the legislature in 2013 as  SB 70.  This is the Governor’s big criminal justice reform that he is so proud of. The biggest problem I’ve seen with PSIA is that it doesn’t do anything to reduce the amount of criminals. This could be done by getting rid of victim-less crimes. Instead of getting rid of victim-less crimes, PSIA treats criminals differently in a way that shifts cost of handling those criminals from the State to the Counties. That is really putting a lot of strain on the counties, which area already lacking cash.

Item 2 – Attorney General’s Office to provide an overview and answer Committee questions regarding the following Other Funds:

  • Law Enforcement Officers Training Fund – Company 3010

This fund has quite a bit of money going through it. Looking at the document prepared for GOAC the fund brings in over $3 million in revenue and about the same in expenses for fiscal year 2015.

  • 911 Telecommunicator Training Fund – Company 3010

This program shows expenses of over $220,000 for fiscal year 2015 according to the document provided to GOAC.

Item 3 – Unified Judicial System to provide an overview and answer Committee questions regarding the Court Automation Fund – Company 3012

The document provided to GOAC shows this fund gets almost $8 million in revenue and just over $6 million in expenses for fiscal year 2015.

Item 4 – School and Public Lands to provide an overview and answer Committee questions regarding the Human Services Fund – Company 5018

This particular fund I really hadn’t researched before. Here is what the document from SPL says about the fund:

Human Services Fund Description
Human Services Fund Description

Item 5 – Board of Massage Therapists to provide an overview and answer Committee questions regarding Company 6503

The document provided to GOAC shows revenue of just under $50k and expenses of just under $68k for fiscal year 2015.

Item 6 – Department of Environment and Natural Resources to provide an overview and answer Committee questions regarding the Petroleum Release Compensation Fund – Company 3036

The document provided GOAC shows this fund brings in revenue of just under $2 million in fiscal year 2015.

Item 7 – Department of Social Services to discuss:

  • The status of the open hospital administrator’s position at the Human Services Center
  • Safety measures at the Human Services Center

No documents have been posted for DSS yet.

Item 8 – Secretary of State Agreed Upon Procedures Report

Post forthcoming!

Item 9 – Department of Legislative Audit to review fiscal year 2015 separately issued audit reports and Single Audit findings

Legislative Audit’s report can be viewed here.

Item 10 – Review draft of the GOAC Annual Report to the Executive Board and authorize the Chair to finalize the report

The current draft of the report can be viewed here.