- Associated Press - Friday, February 5, 2016

PIERRE, S.D. (AP) - Gov. Dennis Daugaard is proposing an overhaul of oversight for state government entities and outside organizations that receive grants through the state after a murder-suicide last year involving two employees of a Platte-based educational cooperative.

South Dakota needs to have a better internal control system that “reaches” into third-party organizations such as Mid-Central Educational Cooperative, he said Friday. His legislation would establish a state board that would be tasked with creating guidelines for an internal control system for many areas of government and require organizations that receive grants through the state to attest that they enforce conflict-of-interest policies, among other guarantees.

Mid-Central had handled administration of the federal GEAR UP college-readiness grant for the state until the agreement was canceled last year. Hours after the state Department of Education informed Mid-Central that it was losing its contract, the cooperative’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 has said there’s an ongoing state-federal financial investigation surrounding GEAR UP.

Daugaard said in his State of the State address that he had asked Lt. Gov. Matt Michels to review oversight of outside entities that manage grants for the state. The bill introduced this week is the result of that work, Daugaard said.

The seven-member State Board of Internal Control would draft a code of conduct and conflict of interest policy for state agencies, which include the Legislature, constitutional officers and other government entities under the proposal.

State employees who suspect a conflict of interest, fraud or theft are required to report it to a supervisor, the attorney general’s office or the Department of Legislative Audit under the measure.

Democrats have called for ethics legislation after the GEAR UP and EB-5 visa program scandals. But Democratic Rep. Peggy Gibson said the governor’s program won’t work, saying it amounts to “the machine checking the machine.”

A measure that Democratic lawmakers introduced this year would create a government accountability committee to hear complaints against lawmakers, agency employees and state board members. It also would also be able to propose legislation, conduct hearings and subpoena witnesses.

“These are big scandals. EB-5 is a big scandal. GEAR UP is a huge scandal,” Gibson said. “Seven people have lost their lives, and they should not have had to lose their lives over unaccountability and irresponsibility, no internal controls, in state government.”

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