- Associated Press - Wednesday, November 4, 2015

PIERRE, S.D. (AP) - The state is reviewing roughly $3 million in government grants and contracts to an educational cooperative that managed a program currently involved in an investigation by state and federal authorities after two employees of the cooperative died in a murder-suicide.

The nearly two dozen grants and contracts between the state and Mid-Central Educational Cooperative under assessment by the Department of Legislative Audit include a mix of state and federal funds, the auditor’s office said in a letter to state lawmakers on Tuesday.

The dive into the state’s full relationship with Mid-Central, thrust into the spotlight because of the murder-suicide involving its employees, expands the audit department’s gaze beyond the federal GEAR UP grant program, which was managed by the cooperative until September.

“Given the situation at Mid-Central, the governor believes that it’s prudent to review all of the grants and contracts that they hold beyond the GEAR UP grant,” said Tony Venhuizen, chief of staff to Gov. Dennis Daugaard.

An attorney for Mid-Central didn’t immediately respond to a request for comment.

An assessment previously flagged GEAR UP as a program with a high risk of noncompliance with federal requirements expected to be met as a condition of receiving a grant, which is a reason why it was audited, Auditor General Martin Guindon told lawmakers at a legislative oversight committee last week.

Audits of that program discovered financial problems and accounting failures that contributed to the state’s decision not to renew its most recent $4.3 million contract with the cooperative for management of GEAR UP.

Hours after the education department informed Mid-Central that it was losing its contract, Mid-Central’s business manager Scott Westerhuis shot his wife and four children and then set the family home near Platte ablaze before shooting himself. His wife Nicole Westerhuis was assistant business manager.

Attorney General Marty Jackley announced the final conclusions of the death investigation on Tuesday. Jackley said the investigation found no evidence that Nicole Westerhuis or any other party was responsible for the deaths. No soot was found in the airways of any of the six bodies, meaning all died before the fire engulfed the house, he said.

Jackley also disclosed an ongoing state-federal financial investigation, which he said was related to GEAR UP.

A judge in October granted the Department of Legislative Audit access to files and financial documents held by the state Division of Criminal Investigation for an inquiry into the GEAR UP program. Access to investigatory information will help inform the risk assessment of the other grants and programs, Guindon said.

The six federal grants for the 2014-2015 school year under assessment went to the state Department of Education before going to Mid-Central as a sub-recipient. The largest is a nearly $1.3 million grant for college-readiness program called the College Access Challenge Grant Program.

The 16 contracts with Mid-Central range from about $212,000 for delivering professional development to $120,000 for providing access to online college readiness coursework.

An inquiry into organizations that managed grant money as part of GEAR UP is also being accelerated, Guindon said last week. Previous audits did not look at organizations that received GEAR UP funding from Mid-Central through the agreement.

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This story has been corrected to show that a state auditor is completing the review, not the Office of the State Auditor. It has also been corrected to show that the investigation into the GEAR UP program is a state and federal investigation, not a federal investigation.

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