In August 2016, the Department of Legislative Audit presented a report titled “Other Fund Information by Agency” to the Government Audit and Operations Committee. Pages 9–12 list 239 state agency honey pots with a net value of $665 million:
These monies are pooled for investment purposes in what is referred to as the Cash Flow Portfolio (sometimes incorrectly referred to as the Cash Flow Fund). A layperson’s description of the Cash Flow Portfolio would be that it is an account where all of the State’s idle monies have been pooled for investment purposes. There is a separate audit report issued annually by our office for the State Investment Council’s portfolios. In this report, this portfolio is separated from the other managed portfolios because it has specific classes of securities and investments that it can be invested in. Generally speaking, these investments are shorter in duration so as to not tie up the available cash flow needed to run the state’s operations [Bob Christianson, state government audit manager, Department of Legislative Audit, letter to GOAC, 2016.08.23].
Among these pots of money making more money for the state is Company 3052, the South Dakota Certified Beef Fund. Held by the Department of Agriculture, the South Dakota Certified Beef Fund had a balance of $104,670.17 at the end of Fiscal Year 2016, down slightly from $108,620.96 during the preceding two fiscal years. The South Dakota Certified Beef Fund was in the red by five figures in the first two years of the Daugaard Administration, but the Legislature appears to have erased that deficit and replenished the fund with about $140K in FY2013.
That’s odd: after FY2013, South Dakota Certified Beef was generally recognized as a failure. Very few farmers and ranchers enrolled, and Northern Beef Packers, the Aberdeen packing plant that was the backbone of Governor Mike Rounds’s great 2004 brainstorm, had gone bankrupt. The state had erased the beef program’s website by then, and Google finds no current mention of the program on the state’s website.
The old Northern Beef Packers is up and running as Demkota Ranch Beef/New Angus, and we can get their meat at all six Ken’s Super Fair Foods locations. The product does not appear to carry any South Dakota Certified Beef label.
It’s nice that we have an extra $104K sitting in the bank earning money for the state. But I have to wonder: is there some upcoming beef-related function for that money, or could we just close that fund and invest in a couple more highway patrol officers or high school math teachers?