- Associated Press - Monday, May 18, 2015

PIERRE, S.D. (AP) - A legislative audit committee should look into a school district insurance pool with a roughly $8 million deficit that is managed by a nonprofit organization, the South Dakota Legislature’s Executive Board voted on Monday.

The board voted 12-3 to recommend the Government Operations and Audit Committee study the shortfall in the pool managed by the Associated School Boards of South Dakota. Association Executive Director Wade Pogany said about 60 school districts in the state are included in the pool, which he said is facing the shortfall in part because of increasing health care costs.

Rep. Don Haggar, a Republican from Sioux Falls, said the shortfall represents a significant amount of money that should be investigated further.

“I think we have a responsibility to ask some appropriate questions, to do some due diligence and to just find out what happened,” he said. “There are a lot of questions, and I think it would be prudent to get some answers.”

Pogany told the group of lawmakers that his organization has taken steps to help make sure premium payments cover the costs of claims moving forward with an eye toward debt reduction. Those actions include significantly reducing the number of plans available and moving to a new insurance vendor. Pogany also said a comprehensive audit is moving forward in August.

Pogany said the organization has had to borrow money over time to pay outstanding claims.

“I don’t want to do anything that hurts the schools by any means, so you have my word that we’re committed to make sure this plan works,” Pogany told the Executive Board.

Republican Sen. Larry Tidemann, vice chairman of the Government Operations and Audit Committee, said the panel likely wouldn’t take up the recommendation at its scheduled meeting on Tuesday because the agenda had already been set.

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