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Wyland Proposes New Legislative Committee to Fill Oversight Gap That Let GEAR UP Go Bad

Eager reader and responsible citizen Michael Wyland isn’t interested in scandal-mongering. He’s interested in stopping future scandals before they start.

That’s why he’s presenting to the Legislature a plan to tighten up oversight of government dollars and prevent future scandals like the GEAR UP scam.

In a document sent to all legislators this week, Wyland explains that GEAR UP was ripe for Mid-Central Educational Cooperative business manager Scott Westerhuis’s million-dollar pilfering because no one in state government was interested enough to monitor the federal grant:

…no one in South Dakota state government leadership, most particularly the state’s education department, ever had interest in GEAR UP. No one in state government ever developed interest in it, except to eventually identify its operation as a state-level financial accountability problem to be handled. Despite assurances included in the state’s 2005 and 2011 GEAR UP grant applications, no state resources were ever allocated to GEAR UP, including virtually absent programmatic (as opposed to financial) oversight by state government leaders.

South Dakota’s GEAR UP was an orphaned program, an “out of sight, out of mind” initiative administered by contract far from the state capital. As far as the state as concerned, no news was good news; only when the news became bad did state officials become involved, and, even then, only in a limited and self-defensive way. The “news” was limited to issues of financial accountability – at no point did state officials evince any concerns about the state’s GEAR UP programmatic operations or outcomes [Michael L. Wyland, “South Dakota’s GEAR UP Scandal and Possible Solutions,” document submitted to legislators, December 2018].

Wyland say the feds weren’t exactly paying attention, either:

The federal government shares blame with the state for South Dakota’s GEAR UP scandal. South Dakota’s hastily-prepared 2005 grant application was approved by the U.S. Department of Education despite its being of generally poor quality and nonresponsive or noncompliant with some federal GEAR UP requirements, most notably the requirement that at least 50 percent of funds be directed to college scholarships for program participants3. The state’s evaluation report at the end of the six-year grant period showed little or no impact, despite expenditure of almost $7 million in federal funds and a similar [amount] in local match. Even though the 2005-2011 GEAR UP program in South Dakota was unsuccessful, the state’s 2011 application for 2012-2018 was not only approved, but approved for more than three times the initial award – about $24 million in federal funds to be matched by $24 million in state and local effort [Wyland, Dec 2018].

I’ll contend it was easy for Westerhuis to take money from the till and to convince Dan Guericke to try covering up his scam by illegally backdating a contract because Westerhuis could play the biggest shark in the tank. No one from Pierre or Washington was coming to bite anyone who misbehaved, so Westerhuis could bully everyone else involved with GEAR UP into following his lead and not the money.

But the criminal enterprise sprung up from the failure of management and leadership. “[S]tate government is,” says Wyland, “at present and by its leaders’ own admissions, ill-equipped to provide oversight and investigation of non-criminal, non-financial issues in executive departments.” Wyland thus proposes a new committee and new staff:

The solution to the problem is, quite simply, to restrict GOAC’s committee charter to financial oversight and investigation, as is its current practice and limitation based on statements by the Auditor General. Replicate GOAC’s structure and function in a new oversight and investigative function under the SD Legislature dedicated to program and management review of state government.

The new body could coordinate its activities with GOAC and DCI, just as GOAC and DCI currently coordinate their activities, but it would have its own legislative committee, its own budget, and its own staff support through an office analogous to, but independent of, DLA and the Auditor General. It would operate as a legislative committee and be “chartered” with a negotiated subpoena power sufficient to enforce its oversight and investigative mandate [Wyland, Dec 2018].

Governor-Elect Kristi Noem has promised there will be “no new boards, no new commissions, and no new blue ribbon task forces,” so unless Wyland can demonstrate that increased oversight makes Noem’s base feel righteous and fuzzy inside, a whole new Legislative committee with funded staff is dead on arrival. But Wyland concludes by saying that the state’s whimper-not-bang closing of the book on GEAR UP isn’t the end of the story; there may be similar GEAR UPs under South Dakota’s inattentive management frittering away taxpayer dollars:

We know that Mid-Central Educational Cooperative, with Scott and Nicole Westerhuis in financial leadership, administered other federal grant programs on behalf of the state’s Department of Education.

Based on the events associated with GEAR UP, it would be reasonable for the state to investigate the programmatic and management of these other state education contracted and MCEC-operated programs. However, just as in the case of GEAR UP, that programmatic and management investigation has not been done.

Building on this argument, it would be prudent to have the capacity to examine and assess program and management success in other state agencies and departments to verify that what happened with the education department and GEAR UP isn’t happening elsewhere in state government [Wyland, Dec 2018].

GEAR UP went wrong because state government wasn’t paying attention. Wyland contends state government still lacks the tools to pay attention. He proposes new eyeballs to pay that due attention.

Will the new Governor and mostly same-old Legislature* pay attention?

*82 out of 105 Legislators elected last month were either incumbents or past legislators returning to the Capitol. Once inaugurated, Governor Noem will get to appoint replacements for two of them, the deceased Chuck Turbiville and the resigned Deb Peters.

16 Comments

  1. leslie 2018-12-14

    Has jackley given a public advisory report of the oversight tragedy as chief law enforcement official before he leaves office?

  2. Jason 2018-12-14

    “The state’s evaluation report at the end of the six-year grant period showed little or no impact, despite expenditure of almost $7 million in federal funds and a similar [amount] in local match.”

    It looks like the Feds and State should ditch the project since it is not working.

  3. mike from iowa 2018-12-14

    Troll, did you bother to see where those funds didn’t go? Look deeper and find how much got to its intended targets.

  4. leslie 2018-12-14

    Knee jerk jason. Educate yourself. We here have followed MCEC fraud since the fire and many here personally know and admire many of the local principal players.

  5. Dana P 2018-12-14

    South Dakota continues to get exposed for its corruption and lack of efforts to have better oversight. Voters voted for a bill that would have helped to improve this oversight and attack corruption. South Dakota legislators didn’t care South Dakota citizens voted for. Ignored it.

    And we get a shrug of the shoulders from Jason. Wow

  6. Dicta 2018-12-14

    I am consistently impressed by Mr. Wyland’s thoughtful critiques. I hope the legislature listens.

  7. mike from iowa 2018-12-14

    Wingnuts won’t listen any longer than it takes for perfectly sensible suggestions to traverse one ear and exit the other.

    Note the lack of oversight from wingnuts in DC. The loser in charge of minority wingnuts in the house claims there is no need for Dems to investigate Drumpf because they already have.

    One of them also said they found no collusion between Drumpf and Russians because they never looked for any.

    Wingnuts are scared to death to be held accountable. If they actually had to perform oversight they would find crimes they can’t explain away through plausible deniability

  8. mike from iowa 2018-12-14

    Conaway walks back comment after saying House Intel didn’t probe collusion.

    This was shortly after the House’s Devin Numbnuts led investigation was ended w/o calling a whole list of crucial witnesses because wingnuts wouldn’t issue subpoenas.

    This is also when Drumpf tweeted the House report cleared him of collusion.

  9. Porter Lansing 2018-12-14

    Mr. Wyland has a rough row to hoe. SD legislators, being of few new ideas and even less desire to improve have bought into Reagan’s gospel of small government. These part time lawmakers can then claim victory for doing virtually nothing.
    The best government is BIG GOVERNMENT, run efficiently with lots of oversight and transparency.

  10. leslie 2018-12-14

    Wyland’s efforts are heroic and Lansing has been hitting out of the park. Conservatives can’t digest liberal progress with Mercer/KOTA/pre-Tupper RCJ news outlets steeped in religious agricultural thinking (dicta was 1st to scream “socialism” here when Venezuela plunged into their own bubble crisis). Frauds by republicans EB5, MCEC, ethics initiatve batted down, restrictive counter-legislation IM22, BLACK ELK Peak are typical REPUBLICAN ostrich postures.

  11. grudznick 2018-12-14

    The legislatures should have their own staff look into this again instead of having politicians who don’t know anything sit around a table and posture.

  12. Donald Pay 2018-12-14

    I sort of agree with grudz, although I don’t think the legislative staff can do this. I think you want to keep the politicians out of these things altogether, and that includes the Governor. There should be a professional state employee in charge. Someone whose job is to keep on top of this stuff. There is no reason the Department of Education fobs this off on a cooperative, and then does nothing.

  13. marvin kammerer 2018-12-15

    lets include eb-5 in this mess.sen.rounds, jackley & maybe even a former us.attorney have not told all they know!

  14. Cory Allen Heidelberger Post author | 2018-12-15

    The problem, Dicta, is that Wyland is thoughtfully suggesting the state spend more money to apply more oversight to the big federal grants that Republican cronies currently get to disburse without supervision to their hometown pals. I expect Wyland’s proposal will go over like a lead balloon. I invite the Legislature to prove me wrong.

  15. grudznick 2018-12-15

    Mr. Pay, I am told education employees have been transferred to the legislatures to serve as exactly that sort of professional employee. I bet you a gravy laden breakfast they are reinvestigating right now before Gov. Daugaard leaves office.

  16. Michael L. Wyland 2018-12-16

    Cory:

    Thank you for the kind words and for writing about my proposal. Special thanks to Dicta and others who have said nice things about me and/or my posts on DFP.

    My proposal is larger than federal grants and contracts. I believe that a GOAC-like entity housed in the legislative branch should have similar powers to GOAC; namely, to look at *any* project, program, or service delivered by state government, regardless of how it is funded. GOAC has that audit capacity now, as I understand it. I would give a companion agency the same authority to perform management audits and oversight in state government.

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