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140 Businesses Get Too Much Coronavirus Relief Cash; So Does Error-Prone Guidehouse

Last October, Governor Kristi Noem outsourced the management of federal coronavirus relief funds to Guidehouse, an international consulting firm. The original contract was for $6,000,000; in January, the state extended that contract through the end of 2021 and upped the fee to $10,000,000.

For that price, Guidehouse rolled those checks out slowly and now has managed to send the wrong amount to 170 South Dakota businesses:

Rough numbers presented to state lawmakers Tuesday indicate that about 140 South Dakota businesses originally received larger COVID-19 grants than they should have and about 30 got less than they were due.

Together those ‘overs’ and ‘unders’ totaled about $4 million, state Finance Commissioner Liza Clark told the Legislature’s Appropriations Committee. “So far it’s been minimal and we’ve paid out anybody who was underpaid,” she said [Bob Mercer, “S.D. Officials Working on Plan to Get Back Covid-19 Grants That Were Overpaid to Businesses,” KELO-TV, 2021.05.11].

Perhaps the “overs” should include the $4M tip we threw out Guidehouse in January, and perhaps the original $6M we threw at them in October thinking they could handle such huge sums more effectively than the state employees already in place to handle our public dollars.

Mercer’s report doesn’t break down how much of the $4M error was “over” that we need to reclaim”; he does say that six of the businesses that Guidehouse overpaid have returned $802K to the state. If Clark’s report to Joint Appropriations yesterday referred strictly to errors in business grants and not to the non-profits and health care providers that have received CRF funds, then Guidehouse’s 170 oopsies equal 3.6% of the 4,775 businesses receiving business grants so far.

I have to wonder if the Bureau of Finance and Management and the Department of Revenue and the State Treasurer put the wrong amount on 3.6% of the checks they issue.

6 Comments

  1. Eve Fisher 2021-05-12

    Maybe we could also work to get the money back from Guidehouse, too?
    What database is Noem using where she finds this endless array of out of state over-priced incompetents?
    Oh – yeah – Ian Fury or Corey Lewandowski, right?

  2. Cory Allen Heidelberger Post author | 2021-05-12

    If businesses were overpaid or underpaid, it would make perfect sense that some portion of that money come out of Guidehouse’s payment. Mishandling taxpayer dollars, giving out public dollars to people who don’t have it coming, failing to deliver federal benefits to individuals who are entitled to receive them—those are all pretty serious errors for which the state could face penalties. I guess we bear the blame for hiring some bumbling private contractor, but that private contractor needs to be held accountable, and nothing says accountability like cash.

  3. grudznick 2021-05-12

    The bossturds! Nobody should have gotten free lunch in the first place and just mark down grudznick’s words now: most of these people were probably liars and frauds. They should all have to pay it back.

  4. Arlo Blundt 2021-05-12

    Well, Grudz, can you imagine if Bill Janklow were Governor running this program….would he spend 10 million dollars on an out of state consultant??? Fat Chance. He’d sit down with a couple of his “numbers guys” and in 30 minutes develop the formula. Then he’d bring in his Revenue Secretary and Budget Director and tell them to put together a work group with one member of his immediate staff and run through the applications, edit requests on the terms of the law and their applications, apply the formula, and submit a draft of the awards to him by the end of the week. When that was done, he’d review their draft, adjust amounts to what made sense to him and send it down to Dave Volk the Treasurer with a note “Before you cut the checks, eyeball this list and adjust as you see fit. (Volk is writing the checks). If the disparity is large, let me know.” And that process would not cost 10 cents over the Department budgets. There’s nothing so unusual about this program that it requires a 10 million dollar consultant. What it does require is administrative ability.

  5. leslie 2021-05-14

    Replying to
    @WendySiegelman
    Here’s an interesting item caught by
    @clliday
    from 2018 noting $50,000 donation from Trump Foundation to the school attended by Barron Trump as well as Allen Weisselberg’s grandchildren…

    was this “donation” really just a tuition payment for Barron?

    “NY Prosecutors Subpoena Manhattan Private School – looking into tuition payments for the grandchildren of Trump Org CFO Allen Weisselberg. From 2012 to 2019, $500,000+ of tuition was paid for with checks signed by Weisselberg or Trump….”

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