Opening up reports about groups that administer state and federal funds could help avert scandals like Gear Up and EB-5, lawmakers said Tuesday.
Sen. Deb Peters, R-Hartford, said she'd like to bring legislation in 2018 that would require private groups that receive state funds to publicly share their audits. Groups that receive pass-through funds through those contractors should be publicly probed as well, she said.
The calls for new law came Tuesday in Sioux Falls as the Government Operations and Audit Committee considered testimony about a pair of probes aimed at assessing the misuse of state and federal funds at a Platte educational cooperative.
"If we put those as public, that allows one more level of public scrutiny that could happen, that maybe we could have caught something with Gear Up a little bit sooner," she told Argus Leader Media.
Auditors who investigated Mid-Central Educational Cooperative said Scott Westerhuis, the group's former business manager, approved "loans" of more than $7.8 million to three groups Westerhuis created to help fund their payroll. The payments came without approval from the Mid-Central board and $1.4 million remains unaccounted for, the auditors said.
And those three organizations, American Indian Institute for Innovation, Oceti Sakowin Education Consortium and Oceti Sakowin Distance Education Consortium Incorporated, appear to have received the funds without any oversight, said local government audit manager Russ Olson.
"We could not find any evidence that the nonprofits were audited," he said.
Lawmakers on the committee agreed that the panel should bring legislation dealing with conflicts of interest or additional grant fund oversight.
And efforts to bring more answers about the Gear Up scandal should also include a series of public hearings about the misappropriation of state funds through Mid-Central, said Sen. Stace Nelson, R-Fulton.
"We honestly have a right to know where that money went,” Nelson said of the $1.4 million still unaccounted for. "We're going to have these hearings specifically to look at the corruption that had been identified in the Gear Up program here in South Dakota."
Peters said she hoped the Legislature could also provide additional information to elected officials at all levels to ensure they know how to properly scrutinize financial documents.
She said the state should also shore up conflict of interest disclosure and provide stricter separations between those who write grants and those who assess their implementation.
"I think we've let too much slide," Peters said, "we need to get a little more scrutiny."
Westerhuis in 2015 killed his wife and four children before setting his Platte home ablaze and turning the gun on himself. Hours earlier Westerhuis's employer learned that Mid-Central would not receive a multi-million dollar grant.