Auditor General Briefs GOAC on Mid-Central/GEAR UP Tuesday; Nelson Demanding Answers from Schoenfish

Correction/Update 16:11 CDT: Auditor General Marty Gunidon e-mailed me to correct my original report. He will not be presenting his final report on Mid-Central/GEAR UP on Tuesday. He is appearing before the Government Operations and Audit Committee to brief new members of the committee on “the timeline and nature of the work we have conducted regarding the Department of Education, Mid Central Education Cooperative and related parties and the status of where we are with the reports.  I will not be discussing the reports or the findings contained in those reports at Tuesday’s meeting as they are not yet ready for release.”

I regret the error and have amended the headline to reflect Auditor General Guindon’s statement. I apparently misread Mercer’s statement, “Come this Tuesday, he presents his report to the Legislature’s Government Operations and Audit Committee” to mean Guindon would present his final report rather than a version of the briefing he presented to the Legislative Executive Board this week. Even absent a final report, expect Senator Nelson to seek an opportunity to ask some hard questions.

I leave the original text of my post below, with new italics to reflect my erroneous statements.

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Bob Mercer notes that the Department of Legislative Audit will present a much-anticipated Special Review Report on the Mid-Central Educational Cooperative’s mishandling of the GEAR UP grant to the Government Operations and Audit Committee next Tuesday. This week Guindon told the Legislative Executive Board that he has “one interview left” before Tuesday’s report.

GOAC has a full agenda Tuesday, with the annual state budget audit, brand board, telecommunications assistance for disabled folks, and non-meandered waters all before lunch and the Mid-Central discussion after lunch, followed by Bureau of Human Resources issues. But expect at least one GOAC member, Senator Stace Nelson, to seek extended discussion on Mid-Central. As South Dacola notes, Senator Nelson continues to hammer his Republican District 19 colleague Rep. Kyle Schoenfish, in very direct and personal language, for dodging questions about his accounting firm’s involvement in the GEAR UP scandal:

There have been significant concerns and questions expressed by voters in our district, by other legislators, and even KELO’s Angela Kennecke in a news story, regarding our district Rep. Kyle Schoenfish’s reported involvement in the auditing of certain entities at the center of this scandal. On Jan. 31, I officially forwarded those questions to Rep. Schoenfish. He responded on Feb. 4 stating the questions were “..fairly easy to address.” Despite that statement, to date he has refused to provide answers to those questions asked by Kennecke and others. Additionally, Rep. Schoenfish failed to show up for two of our district’s five cracker barrels (legislative forums), one in Corsica on Feb. 16, and the other in his hometown of Scotland on March 11. He now claims repeatedly in his articles to our local papers that he has been “attacked” by “dishonest politicians and people” and claims to be a victim of “meritless political attacks.”

Rep. Schoenfish is being “attacked” by his own record and the ugly appearance that comes from avoiding answering questions that the public has a right to have answered. In regards to his missing or avoiding cracker barrels, if I as a husband, daddy, grandfather, small Sioux Falls business manager, hobby farmer and busted-up old Marine can make time to meet my obligations and drive several hours to attend the voters’ cracker barrels to be answerable to you, I expect a young, single man living at home and working for his father to make time for the responsibilities he knowingly signed on to (and got paid for), or to resign if he is unwilling to do so [Sen. Stace Nelson, “Facing Corruption; Facing the Voters,” Yankton Press & Dakotan, 2017.04.17].

If Senator Nelson uses Tuesday’s Mid-Central discussion to continue his vengeful assault on Rep. Schoenfish, he may not find back-up on the committee. Six of the seven other Republicans on the committee are reliable GOP mainstreamers who seem inclined to avoid in-caucus attacks on committee time; the seventh, Senator Neal Tapio, is too busy dreaming of federal office to pay attention to Nelson, Schoenfish, or GEAR UP. If Nelson turns to the two Democrats on GOAC, he’ll find Rep. Susan Wismer likely focusing her sharp accountant’s mind on the numbers, not the names, and Senator Billie Sutton balancing his duty to his District 21, where GEAR UP blew up, with his urge to moderation (and possibly the need to finish his McGovern Day speech announcing his run for Governor).

Senator Nelson’s tough questions are a side reason to tune in to GOAC on Tuesday, April 25. The main reason is to listen to Auditor General Marty Guindon and read his report on what he has found in the dark, twisted accounts of the Mid-Central Educational Cooperative.


59 Responses to Auditor General Briefs GOAC on Mid-Central/GEAR UP Tuesday; Nelson Demanding Answers from Schoenfish

  1. Sen. Nelson’s piece in the Yankton paper is well written and to the point.

  2. Marty Guindon promised in 2015 that his review would be a MCEC review, not a GEAR UP review. He would be looking at other federal programs administered by MCEC on behalf of the state, and he would look at entities that received funds from MCEC, like the PAST Foundation as well as AIII and OSEC. My hope is that the comprehensiveness of his investigation is what has caused it to take a year longer than his original estimate of six months.

    Also, I think the focus on Schoenfish is misplaced. His 2014 audit pointed out problems and noted that MCEC’s board had been told for eight years that problems existed. Most of the criticism of Schoenfish is coming from people who don’t know the role and limits of audits, or the difference between a financial audit and a forensic audit.

  3. Maybe you didn’t read this blog post before you commented, Mr. Wyland. Sen. Nelson is criticizing Rep. Schoenfish for avoiding questions from the press and skipping town halls with his constituents. It’s all fine and dandy that you choose to defend Rep. Schoenfish. But the elected official ought to develop the cojones to answer questions for himself about his performance as an auditor of this scandal-plagued, taxpayer-fleecing organization. Or are you Rep. Schoenfish’s spokesman?

  4. Well, he did show up for three of the five cracker barrels, so he’s hardly in hiding.

    As a CPA, there’s also a limited extent to which he can speak publicly about his work with a client, beyond what is in the public record (e.g., his firm’s audit reports).

    For more on my perspective on this, see:
    “This Cooperative’s Defense: ‘Blame the Auditors, Not the Board!'”

    https://nonprofitquarterly.org/2017/03/02/cooperatives-defense-blame-auditors-not-board/

  5. You avoided my question, Mr. Wyland. Are you coordinating Rep. Schoenfish’s PR with him? If so, the readers here should know that.

  6. Sorry. I didn’t avoid it; I neglected to address it. Since I’m writing about it as a journalist, I couldn’t and wouldn’t be working on behalf of anyone involved.

  7. Ror,

    I have no affiliation or interest in anyone or anything related to this matter except as a citizen desiring good government.

    Whether one is a lawyer, CPA, doctor, etc., there are professional standards which allow and restrict public discussion of matter which affect a client or patient. Failure to follow those standards subjects one to both civil and criminal exposure plus may imperil one’s professional errors and omissions insurance.

    It is entirely plausible that Schoenfish could clear his name/reputation politically but then expose himself professionally with regard to professional standards and a cancellation of his insurance policy. Alternatively, honor your professional standard obligations to your client and terms of your insurance policy but get roasted politically. Quite a Catch-22.

    Whether Schoenfish has professional or political exposure will come to light as this unfolds (beginning with LegAudit’s report and put him in a catch-22 at this stage seems unfair to me.

  8. Go Stace! Thanks for working hard to fight corruption in SD! It’s just too bad that more legislators aren’t doing this.

  9. I can see the predicament Rep. Schoenfish is in, Troy and Michael. The public in general, and Rep. Schoenfish’s constituents specifically, surely want answers.

    Rep. Schoenfish seems to be digging himself a hole politically by skipping 2 of 5 cracker barrels, claiming that questions are “..fairly easy to address” then failing to address them and ducking the press, and by lashing out at unnamed persons who would dare to raise questions. Schoenfish by his own actions is making himself look guilty of something. The fact is, nothing that Sen. Nelson says in the Yankton paper is at all unfair or unwarranted. He is saying what a lot of people are thinking.

  10. Troy is just following the closed record SD one party rule. Never speak to any media – never, if there are questions that come up about anything that deserves answers. Just tell them it’s all confidential. Everything is just fine is the golden rule.

  11. Stace and Angela Kennecke will work hard to find the answers to this. Everything was just fine also when Wollman was screwing young interns in Pierre. Thanks to Stace and Angela for breaking it open.

  12. Ror,

    I totally agree. There are a lot of people who want answers and have a right to expect answers. And, Schoenfish may want to provide them (thus his “easy to answer” response likely without advice of counsel) and has found out he can’t answer them until ordered to by a court.

    Which may make him look guilty but you know it doesn’t mean he is guilty of anything more than conforming to his professional standards and insurance policy.

  13. Roger Elgersma

    Mr. Wyland, you are what is fake about the Republican party. You talk personal responsibility all you want but you make huge flimsy excuses for those who are not excercizing personal responsibility. If Rep. Schoenfish was a responsible person, he would have dug deeper when he found a problem. As an auditor he could tell his employer that he needed to look more because there was obviously problems. As a legislator he would have told the legislators that there was a problem. As an auditor he does need to keep confidentiality, but that is to the public. As a responsible person he absolutely needed to tell those behind closed doors that he was working for(the legislature) that there was a problem. You can use all the professional word gaming to say that he did one audit or another, but if he was a responsible person he would have done more auditing and investigating if and when he sees a problem. This was not like the Minnehaha county fair auditing mistakes when they had not done such a thorough audit. This is an audit that could clearly see that people were making money for the same project on the main company and its subsidiaries for the same project. This is not just a matter of some money being stolen before it got to the bank. Any responsible manager would check the money themself from time to time. This is a case where the auditor could see someone double and triple dipping on the same project in any type of audit. This is an easy one to see if your eyes are open. I have taken a college auditing class so I am not just guessing here. I am not a guesser anyways. If he said there were problems for eight years, he continued to over look it long enough that he should be thoroughly checked for kickbacks. He either was to stupid to see it,(but he is a CPA so that is a hard excuse to try) or he was in on the deal. Check if he was over paid for his services compared to normal charging. When you use professional bulls–t wordgaming to cover for this, is why professionals lose credibility. Shame on you, but you were raised in a totally conservative South Dakota so we are not surprised, just disgusted with you.

  14. Roger,

    An auditor’s legal and professional obligation is to his client and any irregularities can only be disclosed to his client’s BOD. If he had used information gained as an auditor and disclosed it to the legislature or anyone else, he would violate his obligations as an auditor and likely lose his license.

    There are no divided loyalties here and no gray lines here. An auditor has only one loyalty- the client.

  15. Stace Nelson

    @Troy,
    The oath of office and duty to the taxpayers of SD are supposed to take precedence over looking the other way. The monies audited came from the taxpayers. Ethical obligations as a legislator would require the reporting of malfeasances dealing with taxpayer monies.

  16. Stace,

    Would a legislator-lawyer be allowed to violate attorney-client privilege and provide information to the legislature without a lawful subpoena? A doctor violate patient confidentiality? The answer is no. If they did so violate they would be at minimum civilly exposed and likely to lose their license.

    So, what law are your referencing for a different standard for CPA’s? And, since it would open up the CPA to significant civil financial exposure to make such disclosures, could cancel his professional errors and omissions policy, and subject the CPA to loss of license, I assume if a legislator is so “ethically obligated” you have checked with the AG to confirm the state would represent him in performing these duties as a legislator and the PEPL fund would indemnify him for the financial exposure.

  17. Stace Nelson

    @Troy The monies in question here were taxpayer dollars. The entities in question were psedo private as they were in fact chartered by and answerable to the Department of Education for the massive amount of taxpayer dollars given them,thus the Legislative Audit’s audit of them.

    If he had the conflict of interest that your painting? He had an ethical duty to rectify it.

    He has a fifth amendment right to remain silent Against self-incrimination. There is no such thing as accountant confidentiality. Dr., clergy, and spouse but nothing in the law about accountants.

    But I’m sure YOU checked with the department of public safety and the Attorney General’s office and were already informed of that.

    You stay concerned about creating excuses to keep this covered up. Me? I’ll keep pushing forward and try and get a bright spot light on this ugly corruption they cost the lives of four innocent children and robbed thousands of needy Native kids of desperately needed educational opportunities.

  18. Tara Volesky

    Stace, was this a financial or a forensic audit? Isn’t it a conflict of interest for Mr. Schoenfish to be auditing his cronies? Why is the Department of education protected? By the way,….good job. Last question, will you be packing heat when you go to Pierre Tues?

  19. Stace,

    One of the great things about the internet is I can know what you should without an LRC staff.

    Under SDCL36-20B-40(6) a CPA may have his license revoked if the CPA violates an law or rule governing CPA”s or its professional standards.

    Under Administrative Rule 20:75:05:09 of the State Board of Accountancy, a CPA “may not without the consent of the client disclose any confidential information pertaining to the client obtained in the course of performing professional services” except (see the actual rule under “Confidential client information” as the below exceptions are short-hand and my attempt to describe them in non-legalese and accounting language):

    1) Conforming to its professional standards and rules of the American Institute of CPAs
    2) Validly issued subpoena by a court
    3) During a peer review process
    4) Responding to an inquiry made by the board of accountancy or another investigative or disciplinary body.

    If you can point out the law or rule which includes being obligated to violate the above and effectively whistleblower to the legislature because one is a legislator, Mr. Schoenfish should and must comply. Otherwise, he is under the law obligated to ignore your call for him to violate the law, rules and professional standards of his profession and what you are doing is asking a fellow legislator to violate the law.

    I wonder if that is a contrary to the standards of conduct of a legislator? Hmmmm.

    Tara,

    1) Who knows if it is a financial audit or forensic audit at this time? As I discussed above, the engagement letter is between the client and Schoenfish’s firm and he can’t disclose this without the written consent of his client or legitimate order/subpoena by a legitimate authority (Stace isn’t such a legitimate authority).

    2) If these are cronies of Schoenfish, he can’t accept the engagement and perform services for him. Do you have any evidence of them being his cronies (being from the same time doesn’t make one a crony)?

    3) I don’t know what you are talking about with regard to the Department of Education being protected. Stace is right that DOE and by extension LegAudit have investigative and audit authority of this entity and they are doing so. It is via this process (LegAudit being a recognized investigative authority of the State Board of Accountancy) that Mr. Schoenfish can LEGALLY disclose information. Stace’s call is illegitimate.

  20. Tara Volesky

    Well Troy, don’t you think the client would want to be transparent to the taxpayers, since it is our money?

  21. Tara,

    It doesn’t matter what you think the client would want, I think, Stace thinks, or Kyle thinks. All that matters is whether the client ACTUALLY authorized him to disclose or not.

    In fact, the American Institute of CPA’s (national standards board) revised their professional standards in 2015 to REQUIRE all permission to disclose client information be obtained in writing. The standards list 11 exceptions where the CPA can disclose without written permission. None of them even remotely resemble Stace’s “standard” so unless he can reference a specific law or administrative rule in South Dakota which lists this exception, Schoenfish would be violating the law, rules, professional standards and likely written terms of his engagement letter to do as Stace asks.

    Further, what makes Stace’s call goofy is his statement “There is no such thing as accountant confidentiality. Dr., clergy, and spouse but nothing in the law about accountants.” It took me less than five minutes to find the applicable law which specifically spells it out in law and administrative rule. As a former law enforcement officer, a legislator and possibly someone who has hired an accountant to do his taxes, it strains credibility Stace didn’t know this.

  22. Tara Volesky

    So Troy, could the client grant Mr. Schoenfish permission to to disclose his findings to the public and be questioned by the GOAC Committee?

  23. ..you have the wrong link under “vengeful”

  24. Stace Nelson

    @Troy Let me go get my chore boot on as the male bovine excrement is getting too deep from your posts.

    Either you are being obtuse or simply ignorant, a defendant on trial does not have confidentiality in talking with an accountant. Accountants are called all the time to testify in court proceedings against their clients.

    You are pointing out the conflict of interest in this situation and are choosing to ignore the ethical obligations that are in effect while a legislator is in office.

    If he is working on contracts dealing with public monies, his first obligation is to the taxpayers:

    “1B-1. Maintenance of ethical standards. The people of South Dakota require that their legislators maintain the highest of moral and ethical standards as such standards are essential to assure the trust, respect and confidence of our citizens. Legislators have a solemn responsibility to avoid improper behavior and refrain from conduct that is unbecoming to the legislature or that is inconsistent with the Legislature’s ability to maintain the respect and trust of the people it serves. While it is not possible to write rules to cover every circumstance, each Legislator must do everything in his or her power to deal honorably with the public and with his or her colleagues and must promote an atmosphere in which ethical behavior is readily recognized as a priority and is practiced continually, without fail.

    1B-2. Compliance with specified requirements. Each legislator will comply with all Constitutional and statutory requirements regarding conflicts of interest. Legislators will timely file all required disclosure statements including Statements of Organization, Campaign Finance Reports and Statements of Financial Interest. Legislators must also avoid any conflict of interest which would interfere with their duties and responsibilities as legislators, interfere with the exercise of their best judgment in support of the State of South Dakota or create an improper personal benefit.”

    NOTHING you cite absolves him of these ethical requirements to protect the public’s interests that he was entrusted with.

    Oh? And the AICPA you cite? They say this :

    “0.300.030 The Public Interest
    .01 The public interest principle. Members should accept the obligation to act in a way that will serve the public interest, honor the public trust, and demonstrate a commitment to professionalism.
    .02 A distinguishing mark of a profession is acceptance of its responsibility to the public. The accounting profession’s public consists of clients, credit grantors, governments, employers, investors, the business and financial community, and others who rely on the objectivity and integrity of members to maintain the orderly functioning of commerce. This reliance imposes a public interest responsibility on members. The public interest is defined as the collective well-being of the community of people and institutions that the profession serves.
    .03 In discharging their professional responsibilities, members may encounter conflicting pressures from each of those groups. In resolving those conflicts, members should act with integrity, guided by the precept that when members fulfill their responsibility to the public, clients’ and employers’ interests are best served.
    .04 Those who rely on members expect them to discharge their responsibilities with integrity, objectivity, due professional care, and a genuine interest in serving the public. They are expected to provide quality services, enter into fee arrangements, and offer a range of services—all in a manner that demonstrates a level of professionalism consistent with these Principles of the Code of Professional Conduct.
    .05 All who accept membership in the American Institute of Certified Public Accountants commit themselves to honor the public trust. In return for the faith that the public reposes in them, members should seek to continually demonstrate their dedication to professional excellence. [Prior reference: ET section 53]”

    Maybe you excuse someone looking the other way and claim they are absolved if they didnt report criminal activity involving the public’s money, and of the apparent conflict of interest in doing so as a legislator, doesn’t mean the rest of Us share your enthusiasm to rush to cover the up the GEAR up corruption.

    The organizations were chartered and answerable to the DOE. The monies of these organizations were tax payer dollars. His first loyalty and duty is SUPPOSED to the people of SD, anything that requires him to subvert that duty? Is a conflict of interest. I don’t need the internet or LRC to tell me that. But you go ahead and write editorials to all the papers in SD and defend the years this corruption went on and give the usual establishment cover up excuses.

  25. One would hope, Mr. Nelson’s bloviating rantings aside, that at some point they would call the Education Department people up and ask a couple questions. Is it possible for Mr. Nelson to be the asker?

  26. Stace,

    Your comment “a defendant on trial does not have confidentiality in talking with an accountant.” is correct when the judge tells the accountant to provide information or testify. You are not a judge.

    Your comment “Accountants are called all the time to testify in court proceedings against their clients.” is correct. In the event Kyle gets a subpoena, he may then provide any information he is asked to provide without regard to the client confidentiality as that is a SPECIFIC exception under the law.

    Again, the law/rules/professional standards are specific with regard to guarding confidential client information and your statements don’t supersede that you aren’t an attorney, a CPA, on the Accountancy Board and as hard as you pretend and deceive the public otherwise.

    If he has consulted the Accountancy Board, American Institute of CPA’s, or his insurance carrier, everyone one of them will have advised him to be silent until served with a legitimate subpoena and ignore you.

    Regarding your baseless charge I am defending anything or covering up anything, my only comment is you are asking a CPA to violate the law, rules and professional standards of his profession and you can’t give me a single specific law which says a pronouncement of Stace Nelson of his legislative duties transcend those laws, rules and professional standards.

    I’ve never heard a Republican or Democrat Legislator impugn Marty Guindon who appears to be the person pursuing the matter and I have confidence he will get to bottom of this in due time and in due process.

    And I’m pointing the falseness of your statement “There is no such thing as accountant confidentiality. Dr., clergy, and spouse but nothing in the law about accountants.”

  27. I would be harder on the party that ASKED Schoenfish to audit the data….THEY knew the fine print requirements. Go after the executive branch…WHO asked Schoenfish to do this work and what data did they give him? Marty is suspect IMO

  28. Mr. Volesky, please allow me to humbly correct a minor error in your blogging. You reference the “GOAC Committee.” As a female person who thinks to keep on top of these things, you should already know that GOAC stands for “Government Operations and Audit Committee.” Hence, you seem to be referring to a new entity, one called the Government Operations and Audit Committee Committee, which I presume is used to have the pre-meetings before the meetings to decide what they will decide.

  29. Common mistake Grudznick….what is not so unforgivable is calling TARA a MR!!!

  30. Mrs. Volesky. Now it is my turn to type badly. GOAC Committee be damned.

  31. Stace Nelson

    @Troy there is no privilege of confidentiality with an accountant https://www.translegal.com/feature-articles/testimonial-privileges in court OR in a SD legislature committee hearing into the GEAR Up corruption. Be as obtuse as you wish, that fact will not change.

    Your claims that an accountant that audited GEAR Up & Mid-central Ed Co-op were private business in which the details of any identified malfeasance could not be disclosed by an accountant? Then Legislative Audit, Marty Guindon, and the GOAC would have NO jurisdiction. The FACT that they were audited and the GOAC does have jurisdiction, refute your invocation of absolutions you have no authority to give no matter how hard you attempt to spin the focus away from the ugly corruption that led to the brutal and horrific deaths of 4 innocent children.

    Spare me the Alinsky tactics with your asinine claims that expecting a legislator to put the publics’ interests first, and avoid any conflicts that prevent that, is tantamount to to askthe big rhem to violate laws they should have never put themselves in conflict with.

    Interesting how your attention in the conversations is not on the notorious corruption that’s been uncovered, but on distracting from it with such diversionary comments.

  32. We can all rest soundly knowing that Ms. Peters will get to the bottom of this to everybody’s satisfaction. Let us just relax a bit until Tuesday.

  33. Tara Volesky

    Gruds…no problem….looks like we are both bad at typing, but I think you know what I mean. Right?

  34. Tara Volesky

    Stace, what official offered this audit to Schoenfish?

  35. Stace,

    I agree with your first paragraph. If a court or the SD Legislature properly compels a CPA to violate the confidentiality standards, a CPA must do so as it a specific exception spelled out in the confidentiality laws/rules/standards (which you asserted didn’t exist). Your demand is not a subpoena of a court or a committee of the Legislature.

    I never claimed these entities were a private business. The professional standards do not differentiate on the matter of confidentiality whether it be a private business, non-profit, or governmental entity.

    I accept the legal authority of LegAudit and GOAC to investigate this matter. I simply reject you are a legal authority and understand the wisdom of Schoenfish conforming to professional standards until a LEGITIMATE authority requires he provide confidential client information.

    Regarding your last two paragraphs, assert falsely whatever you want. My commentary is quite simple: Just like a Dr., lawyer, and clergy, there are laws which protect confidential information and laws and procedures for piercing that confidentiality. Because I support the rule of law, I defend those laws and procedures.

    Are you asserting that lawyers who become legislators are required to violate client confidentiality? Doctors? Clergy? If not, why do you think accountants should and site the actual laws which would give them safe harbor for violating these laws (as doing so after a subpoena is a safe harbor)?

    If you are asserting these professions should violate confidentiality when they become legislators, let’s just say I disagree with you.

  36. Lora,

    It would be normal and customary that the engagement between GEAR-Up etc. would between the Board of Directors (client) and Schoenfish. It would not be normal and customary that the engagement would be with another entity to which the CPA would be accountable*. If the Board of Directors is accountable to another entity (e.g. Education), the CPA would only be accountable to DOE if it was specifically detailed in the engagement letter.

    * the reason for this is a CPA can only serve one master under their professional standards. For instance, even though a business is accountable to their banker and the business provides the audit to the banker, the CPA’s professional duty is to the Board and not the bank.

    Tara, see above. The Board likely engaged Schoenfish but one would have to review the engagement letter to know for sure.

  37. Stace Nelson

    @Troy Again, such a concerted effort to divert from the proper discussion of the corruption.

    Please spare me the juvenile antics of claiming I am stating things I never stated.

    My position is that duty and obligations as a legislator required any malfeasance with taxpayer monies be reported and their first duty was to the public interest.

    Your position makes it clear that you claim such duty was secondary and subservient to lesser occupational obligations that came after assuming legislative duties.

    I’m happy to let the court of public opinion judge the matter for themselves, you keep protesting too much.

  38. Mr. Nelson, everybody knows most of the legislatures are basically very common men with little real knowledge about anything regarding all this whatknot that everybody is all worked up over, and the more decisions the legislatures get to make the worse it is for everybody. And you should stop wasting my money with those dumb resolutions or I will initiate a resolution to shut you down.

  39. Stace,

    I think that summary sums up the difference although your are putting a characterization on my position which isn’t exactly accurate but I’m not going to argue with you.

    You might be happy to have this tried in the court of public opinion. The Constitution of our country and state and the fabric of our society depends on the courts of our judicial system and that is the judgment I will value.

    By the way, these are you exact words said yesterday (04-21 at 21:01): “There is no such thing as accountant confidentiality. Dr., clergy, and spouse but nothing in the law about accountants.”

    That is a false statement. I do not know if you said it out of ignorance or an intent to deceive.

    Further, your statement I’m trying to divert anything is also false. There are laws with regard to confidential information and laws/procedures for piercing that confidentiality. I do not believe the cause of fighting corruption is served by forcing others to violate laws, rules and professional standards without following the law to force them to do so.

    If you feel forcing people to violate laws and rules, and professional standards serves the cause of fighting corruption, I not only disagree but consider it odd for a former law enforcement officer.

  40. Ps. I would defend a Dr, attorney, or member of the clergy equally if someone was asserting they violate one’s confidentiality without proper legal subpoena

  41. Lora Hubbel

    Thank you Troy for your explanation. So…do I have this correct? Gear-Up, a non-profit (which has no oversight since SD is one a few states that use the “honor system” for non-profit reporting) was getting millions of dollars from Federal grants and the books were kept solely by the board (I’m assuming the treasurer who gave monthly reports to the entire board). I am also assuming that the grant had some oversight stipulations requiring Executive Dept oversight in order to get the money (an audit, compilation or review?). That contract stipulation would fall in Daugaard’s dear friend Melody Schopp’s lap. Gear-up’s board probably had their books…again which were compiled under the “honor system” ….audited once a year since Federal law requires an audit under some circumstances. But the state doesn’t require audits for non-profits. Not according to SDCL § 47-24-6. Some state government contracts may require an audit and there is a federal requirement to conduct an independent audit under some circumstances.
    So was Schoenfish doing an audit, a review or a compilation? I don’t know which one the Schoenfish people were required to do. If it was merely a review there is no requirement for Schoenfish to do any more than provide a limited level of assurance that the financial statements were free of misrepresentations. Granted some state contracts require an audit. But what was required by the Dept Of Ed and what were the grant stipulations? That would solve the question on what Schoenfish was required to know and report.

  42. Ms. Hubbel, I expect you are righter than right.

  43. I am puzzled as to why anyone is attacking Mr. Wyland. He has presented himself as a knowledgeable and fair commenter on GEAR UP and non-profit issues. He has given me no cause to think he is fronting for Rep. Schoenfish, the Republican Party, or anyone else. I welcome his continued insights and urge other commenters to resist the impulse to attack him just because he preaches caution rather than full war.

  44. I’ll back Troy with another analogy: when I finally oust Al Novstrup and serve as District 3’s Senator, I won’t be able to make a speech in committee or on the Senate floor that reveals information protected by FERPA that I learned in the course of my teaching duties.

  45. Stace Nelson

    @Troy It is NOT lost on me that the first people you attack over the years are not those involved in the wrong doing that besmirches the GOP, but those who attempt to hold them accountable for engaging in conduct that is not Republican. Not one statement in your whole distraction about those who got caught with their hands in the cookie jar or who are trying their best to cover this disgraceful misconduct up from the public. Plenty RINO outrage and idiotic diversionary comments though for any who dare challenge the corrupt & unethical political machine abusing the “R.”

    As in this case, you attempt to twist the conversation away from what is morally right and should be expected of a legislator, by claiming this young man’s first duty was to maintain an absolute confidentiality privilege that is NOT established or recognized as an absolute in our judicial system.

    Either you have confidentiality privilege or you don’t. A person has the privilege of confidentiality in our judicial system with clergy, their spouse, their lawyer, and their doctor. They do NOT have such with a CPA.

    The question at hand is what takes priority in the ethical situation at hand? Does the obligations of legislative office and being bound to the service of the people supersede his personal employment as I assert or can he turn off those obligations for personal gain.

    Again, I reject your asinine repackaging of my position in your diversionary efforts to distract from the real issue.

    I assert his duties as a legislator take priority and require him to report any malfeasance with public monies. You assert some type of perverse immunity from those obligations because of secondary conflicts of interest he placed himself into via his employment.

    You would defend the devil himself if he was embroiled in the establishment machine corruption the rest of us properly denounce.

    How much of your comments herein should be construed as a “stay silent or else” warning to the accountants who know where all the money went?

  46. Stace Nelson

    @CAH You need to beef up on the SD Constitution and statutes. A legislator is protected in what he says in the legislature http://www.sdlegislature.gov/Statutes/Constitution/DisplayStatute.aspx?Type=Statute&Statute=0N-3-11

  47. Wait a minute: you’re telling me that a legislator should in good conscience surrender all obligations based on past professional activities for the sake of making speeches in Pierre? I’m aware of legislators’ immunity during Session, but that’s a passive thing. Immunity does not negate the expectation of confidentiality in teacher-student, attorney-client, accountant-client, doctor-patient relationships. Immunity does not compel a legislator to violate all other confidentiality…

    ..unless you’re telling me that, when I’m chair of GOAC, I can call you in and demand answers to questions that would violate your spouse-spouse confidentiality.

  48. Cory:

    Thanks for your kind words. I appreciate it.

    Lora:

    I answered many of the concerns raised in your last post here on the SouthDaCola blog yesterday. It was a LONG blog post, so I won’t reproduce it here unless there’s a request to do so.

  49. Roger Cornelius

    When South Dakotans yell corruption it is precisely for reasons like this.
    What kind of state government allows a sitting state legislator to have a state contract of any kind?
    Troy once again is trying to muddy the waters with his long dissertation to provide an out for unscrupulous republican politicians.
    When public or taxpayer is involved, the public has a right to know how it was or wasn’t used. There should be no protections or excuses for anyone involved with those public funds.
    Legislators need to be restricted to the income for serving the public and appropriate travel expenses, period.

  50. Roger:

    Schoenfish & Co.’s contract was with MidCentral Educational Cooperative, which is not a state agency. MCEC is a special education cooperative created by a group of local school districts and recognized by the state as an educational agency.

    Further, the audit would typically be paid with school district tax funds, not state or federal dollars. The audits were not of GEAR UP specifically, but of all funds administered by MCEC.

    By the way, I meant to mention earlier that I am all in favor of an exhaustive and proactive investigation of MCEC, GEAR UP, and the other federal grant programs administered by MCEC on behalf of the SD Education Department.

    I’m disappointed that the Auditor General’s report is not yet ready, after all. I reiterate my hope that the comprehensiveness of the report will explain its tardiness (relative to Guindon’s own timeline estimate made in 2015).

    Schoenfish is a distraction from the scandal, which I believe is one reason why MCEC is promoting the distraction by suing him.

  51. Stace Nelson

    @CAH No, I simply told you ” A legislator is protected in what he says in the legislature http://www.sdlegislature.gov/Statutes/Constitution/DisplayStatute.aspx?Type=Statute&Statute=0N-3-11

    No one has encouraged anyone to violate anything. I simply asserted that legislative duty to the public trust and public interest supersedes any personal conflict of interest entanglements that a legislator involves themselves in their personal lives.

  52. Stace Nelson- “No one has encourage anyone to violate anything.”

    Besides the law, administrative rules, professional standards of the accounting profession.

    What a liar.

  53. I’m not convinced that the Legislature could come up with a reason to demand that I (or my fellow substitute teacher Brock Greenfield) give up information protected by FERPA.

  54. Stace Nelson

    @Troy I’m in and out of Sioux Falls a couple times a week, surely my little establishment RINO apologist? You’ve had several years to follow through on your effeminate rant to kick me in the groin. Just make sure you introduce yourself first whenever you get the courage up to try.

    Proposing a legislator abide by their ethical duty to the people first and foremost is obviously alien to a sycophant; however, expecting a legilsator to do protect the public’ interest as a primary controlling obligation doesn’t make me a “liar” no matter how hard you stamp your little feet in temper tantrum anger.

  55. Stace Nelson

    @Jerry I can assure you, any petulant little temper tantrum throwing Loud-mouth who should so attempt to consummate their illegal threat with such an ill-advised illegal assault on my person? Would be afforded the full benefits of the “stand your ground” provisions of our statutes.

  56. Stace,

    Just because you have anger issues, doesn’t mean everyone else has anger issues. It is called “projection.” Speaking of projection, what is up with using the term “effeminate?”

  57. Stace Nelson

    @Troy Remind us all who the angry little effeminate fellow was that infamously and illegally posted a threat to kick me in the groin?

    By “projecting” do YOU mean like claiming others have anger issues, after posting such comments as to illegally assault someone on the blogs?

    I have no anger issues, I simply have no patience with corruption (or sycophants who perpetuate it).

  58. “effeminate”? As if being like a woman is a negative? My, how the conversation devolves. Let’s GOAC’s conversation stays more focused on the facts. We won’t uncover corruption if we get bogged down in personal/political grievances.