After EB-5, Gear Up scandals, Daugaard calls for internal controls
Gov. Dennis Daugaard filed a bill Thursday that would respond to a perceived lack of state control over outside groups that administer state grants and programs like those at the center of the state's EB-5 and Gear Up scandals.
The bill, which was put forth on Daugaard's behalf by the Senate Government Operations and Audit Committee Thursday, would create the State Board of Internal Control charged with overseeing state sub-grantees and ensuring that they properly administer federal dollars.
Some supported the bill early on saying it constituted a good first step in accountability while others said it didn't go far enough to ensure the state wouldn't see another scandal.
Under the bill, the state would also establish a new set of guidelines for organizations that administer state and local grants. The organizations would be required to have in place conflict of interest policies and internal control measures and enforce them, properly file and display forms indicating whether a group is income tax exempt and if applicable, make audits available online. If enacted, the guidelines would take effect on July 1.
The bill also sets up a protocol for employees to report suspected conflicts of interest, fraud or theft in their agency.
A new state Board of Internal Control would also be created under the measure and would be comprised of seven members. Three of the members would represent state agencies and would be appointed by the governor. Those members would serve staggered three-year terms.
The other four members would be the commissioner of the Bureau of Finance and Management, the state auditor, a designee of the Board of Regents and a member of appointed by the Chief Justice of the Supreme Court. The commissioner of the Bureau of Finance and Management would chair the board.
The board would establish internal controls and create a code of conduct as well as a conflict of interest policy for state agencies. State agencies would also be required to appoint an internal controls officer to uphold guidelines and standards within each agency.
Rep. Lee Schoenbeck, R-Watertown, said the measure would be a good first step if the state made an effort to enforce it.
"The strongest message there will be if they shoot the first horse thief they catch, no matter who it is and who their friends are," Schoenbeck said.
Rep. Peggy Gibson, D-Huron, said she's been working on ethics and accountability bills for years and believes that a measure should require an outside organization to audit state agencies.
"That's not acceptable. That's just government checking on government," Gibson said. "We've had this conversation over and over and I still don't see the adequate steps to really take care of the problems."
A spokeswoman for Daugaard didn't respond to a request for comment Thursday. The governor will likely address the measure in a press conference Friday morning.
- New York
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