- Associated Press - Friday, October 30, 2015

PIERRE, S.D. (AP) - An expanded inquiry into organizations that managed grant money as part of a federal college readiness program that came under scrutiny after an apparent murder-suicide is being accelerated.

The findings of an audit into the federal GEAR UP program convinced Auditor General Martin Guindon that his office should look deeper at Mid-Central Educational Cooperative and potentially other organizations that worked with Mid-Central, Guindon told a legislative oversight committee Friday.

GEAR UP has been aimed at improving college readiness for American Indians. Mid-Central managed the program until last month, receiving about $10.7 million in federal funding for it over the last four years.

Criminal investigators believe Mid-Central employee Scott Westerhuis shot his wife and four children in September, then set the family home near Platte ablaze before shooting himself. That was just hours after the state Department of Education informed Mid-Central that it was losing its most recent $4.3 million GEAR UP contract because of financial problems and failure to follow proper accounting procedures.

A judge earlier this month granted the Department of Legislative Audit access files and financial documents in connection to state authorities’ investigation. The state Division of Criminal Investigation’s inquiry encompasses Scott Westerhuis’ personal finances, and Gov. Dennis Daugaard has asked Attorney General Marty Jackley to look beyond Westerhuis for evidence of wrongdoing in the administration of GEAR UP.

Guindon said his office had previously planned to start its deeper inquiry next year.

“Well, the Westerhuis fire changed all that,” he said.

Mid-Central attorney Scott Swier said in an e-mail that the cooperative hasn’t discussed the inquiry with the auditor general. He said the organization will continue to cooperate with the state in its investigations.

Guindon declined to elaborate on which nonprofit or related parties the office’s audit would encompass.

Previous audits did not look at organizations that received GEAR UP funding from Mid-Central through the agreement. Scott Westerhuis and his wife Nicole Westerhuis had ties to at least two of those nonprofit organizations - the American Indian Institute for Innovation and the Oceti Sakowin Education Consortium - which have received at least $2 million in GEAR UP funding since 2012, according to Internal Revenue Service records.

Swier has previously said the cooperative was aware of Scott Westerhuis’ ties to both nonprofits but wasn’t aware of the extent of the affiliation. IRS documents list Westerhuis as chief financial officer of the institute - he was also was an incorporator with the state - and his wife as business manager of the consortium.

An attorney for the American Indian Institute for Innovation and Stacy Phelps, who has been the organization’s chief executive officer, have declined to comment to The Associated Press. The organization’s governing board chairman, John Herrington, didn’t immediately return a telephone message requesting comment. Carlos Rodriguez, secretary and treasurer of the governing board, didn’t answer a telephone call for comment.

Phelps resigned from the state Board of Education in early October. Daugaard, in a letter to the legislative oversight committee, said Phelps’ “continued position on that board would be a distraction from the important work the board performs, given his involvement with GEAR UP.”

Roger Bordeaux, governing board president for the Oceti Sakowin Education Consortium, said in a recent interview that the members decided at a recent board meeting to take the money in the group’s account and move it from Mid-Central to another organization.

Jackley is expected to provide an update about the death investigation next week.

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