SDHSAA Audit Reveals Reimbursement Errors; All Cash Accounted for, Unlike GOED

South Dakota High School Activities Association exec Wayne Carney raised eyebrows at last week’s SDHSAA annual meeting by bringing up the annual state audit of his organization, which reports four major deficiencies:

1. SDHSAA did not report funds moved back and forth between investment and operations accounts. No cash disappeared; SDHSAA just didn’t include these transfers in cash flow reports.
2. Ball-maker and corporate sponsor Baden missed one quarterly payment of $10,500, and SDHSAA didn’t notice.
3. The SDHSAA has held onto the balance of 36 unclaimed checks worth $8,890.32 instead of remitting that amount to the state treasurer as required by South Dakota’s Uniform Unclaimed Property Act.
4. Staff paid for meals with the SDHSAA credit card instead of submitting vouchers for reimbursement, per standard policy. Someone also charged 24 Red Sox tickets for board members and others traveling to a national convention at the end of June 2014.

To weight the gravity of these errors, compare this audit to the 2014 audit of the Governor’s Office of Economic Development following the revelations of the Richard Benda/EB-5 scandal. The GOED audit not only corroborated the finding that GOED chief Benda double-billed just under $6,000 in airplane tickets but also found over $67,000 in insufficiently undocumented expenses, including $14,700 spent on questionable “translation services” and small change spent on Richard Benda’s personal reading. It found Joop Bollen submitting none of his state-mandated documentation. The audit also found that Benda abused his state position to craft his six-figure golden parachute into monitoring EB-5 loans for SDRC Inc.

GOED and SDHSAA both say they have straightened up practices to prevent similar errors in the future. But SDHSAA has accounted for all of its money. Baden has paid its bill. SDHSAA hasn’t handed those unclaimed payments to the state, but they are trying again to contact those folks who haven’t cashed their checks. SDHSAA has gotten reimbursements from the diners and baseball gamers (although the audit report says the SDHSAA at first told the auditor general that they had received reibursement from all ticketholders, then produced a list of receipts that showed no such reimbursements had been received as of the day of the auditor general’s initial inquiry on the matter—naughty, naughty!). At SDHSAA, all cash is now accounted for, and folks who needed to pay have paid.

At GOED, tens of thousands of dollars went down questionable drains, and the state never got that money back.

I put the SDHSAA and GOED audits side by side so we can weight the proper public policy responses. The Legislature heard the GOED audit report last year and mostly shrugged. They blamed all wrongdoing on dead Richard Benda and passed one flimsy conflict-of-interest law this session. I’ll be curious to see if the Legislature is so lenient with the SDHSAA, or if opportunistic legislators will continue to use the activities association as their whipping boy.

Financial Disclosure: The SDHSAA has hired me on numerous occasions since 1994 to judge State Debate, Oral Interp, and One-Act contests. I am pretty sure I have cashed all of those checks.