- Associated Press - Friday, September 25, 2015

SIOUX FALLS, S.D. (AP) - South Dakota is done routing millions of dollars in federal grant money for a Native American college-readiness program through a Platte educational cooperative thrust into the spotlight when an apparent murder-suicide claimed its two business managers.

The state’s $4.3 million contract with Mid-Central Educational Cooperative ended Friday, Tony Venhuizen, Gov. Dennis Daugaard’s chief of staff, said in an email, although state education officials had already decided to pull the funding.

“The hope had been for an orderly and seamless transition from Mid Central to a new administrator, but the sad events in Platte have made that more difficult,” Venhuizen said.

Investigators believe Scott Westerhuis shot his wife and four children last week, then set the family home near Platte ablaze before shooting himself. Authorities are investigating the contract as part of an ongoing inquiry into the deaths.

Attorney General Marty Jackley has said investigators will review a state audit of the cooperative and look over additional financial information. Shortly before the fire, Westerhuis learned the state was not renewing the contract with Mid-Central.

The cooperative provides speech, language and hearing services to several area school districts. Westerhuis was business manager for 15 or 16 years, and his wife, Nicole Westerhuis, served as assistant business manager for about eight years.

Mid-Central has received about $10.7 million in federal GEAR UP funding over the last four years, Venhuizen said.

Before Friday, Mid-Central had a contract with the state to administer that grant funding. Venhuizen said officials are discussing with the Board of Regents potentially turning over administration of the grant to Black Hills State University and the South Dakota School of Mines and Technology.

The state Education Department decided not to renew the contract after a state audit last year took issue with Mid-Central’s documenting of some expenses.

The audit found the co-op owed $214,000 to the state, which it paid. But the audit did not look at organizations that received GEAR UP funding from Mid-Central through the agreement. Scott and Nicole Westerhuis had ties to 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.

Mid-Central referred questions to its attorney, Scott Swier.

Swier in an email 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 and his wife as business manager of the consortium.

Records back to 2012 list no compensation for Scott Westerhuis in his role as CFO. Nicole Westerhuis was paid about $38,500 as business manager and an officer of the education consortium, according to a 2013 report.

Carlos Rodriguez, secretary and treasurer of the American Indian Institute for Innovation’s governing board, said no questions were raised at a board meeting a few weeks ago after a report on the budget and financial position of the institute.

Rodriguez, who lives in Washington, said the loss of GEAR UP funding would be “devastating,” He said the organization does valuable work with Native American children.

Christopher Bordeaux, executive director of the Oceti Sakowin Education Consortium, said that group’s board is meeting in the “near future” to discuss the issue, but he declined to comment further.


Associated Press writer Dirk Lammers contributed to this report.

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