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To: Government Operations and Audit Committee (GOAC) From: Tim Flannery, State Government Audit Manager Date: October 3, 2017 Re: Legislative Audit follow-up information from the August 29, 2017 GOAC meeting
At the request of the Committee at the August 29, 2017 meeting, Legislative Audit has prepared or obtained the following information for the Committee. We have grouped the information by subject area with specific reference to where the follow-up information can be found. By clicking on the “See Item # or See Reply from…” you will be taken to the applicable follow-up information.
GEAR UP Related Follow-up Information:
The Committee asked for the audit history applicable to the GEAR UP grant. Below is that history at both the South Dakota Department of Education (SDDOE) and at the Mid Central Educational Cooperative (MCEC). See Item 2 below.
The Committee asked Legislative Audit to review the written answers and testimony provided by Secretary Schopp for inconsistencies. See Item 6 below.
The Committee asked for copies of BC Kuhn contracts with SDDOE from July 2008 thru June 2012. See “Reply from SDDOE MS Doc.23a” attached to the 10-5-17 GOAC agenda.
The Committee asked Legislative Audit to compare SDDOE subrecipient monitoring changes (per Sec. Schopp’s handout) to Roger Campbell’s emails for inconsistencies. See Item 8 below.
The Committee asked for copies of Richard Melmer’s contracts with MCEC, MCEC’s contracts with the Council of Chief State School Officers and the Board of Regents. See Item 9 below.
The Committee asked to see SDDOE and MCEC payments to Keith Moore. See Item 10 below.
The Committee asked for an additional explanation from Schoenfish & Co. Inc. to question #17 in the Committee’s letter to Schoenfish & Co. Inc. dated August 4, 2017. See “Reply from Schoenfish & Co Doc.22” attached to the 10-5-17 GOAC agenda.
The Committee asked for information on an auditor’s responsibility for reporting fraud to law enforcement. The Auditor General provided a memo with this information. See Item 12 below.
Department of Human Services:
The Committee asked the Department of Human Services to provide the application process for providers to enroll for the conflict case management contract. See Item 5 below.
State Board of Internal Control:
The Committee asked what internal controls were in place for the one year after State employment to prevent potential conflicts of interest. See Item 3 below.
The Committee asked why State Department Secretaries and Bureau Commissioners aren’t currently required to complete conflict of interest forms. See Item 3 below.
Department of Revenue:
The Committee asked the Department of Revenue – Audit Division to provide hours spent on education/audits/reviews. See Item 1 below.
FY17 Audit Metric Distribution by Business Size
*Inactive licenses is made up of business that may have been sold or reorganized, out of state contractors that may nolonger have in-state projects, and other entities that no longer have a South Dakota tax liability.
In the last ten years, 13% of businesses audited have had a follow-up audit. A follow-up audit occurs when a taxpayer’s reporting does not reflect the changes they were asked to make, or other risk factors indicate they need to be revisited.
0%
9%
22%
49%
20%
14% 10%
13%
28%
35%
10% 8% 7%
25%
50%
20%
6% 7%
21%
46%
0%
10%
20%
30%
40%
50%
60%
Inactive Licenses* Reported Zero GrossReceipts
$0.01 to $100,000 $100,000 to $1,000,000 $1,000,000 or more
This graph shows the percentage of businesses that fall into five different size categories. This information is compared to how much of our audit time and
assessments is associated with those same taxpayers.
All Licensed Businesses Audits Completed Audit Hours Net Assessments
FY17 Gross Receipts Inactive Licenses*
Reported Zero Gross Receipts
$0.01 to $100,000
$100,000 to $1,000,000
$1,000,000 or more
Average Hours Per Audit by Business Size
23 26 19 30 48
Item #1
Item #2Government Operations and Audit CommitteeGEAR UP Audit History 2005-2016Prepared by Legislative Audit
Was it Audited as a Major Financial
Assistance Program?
GEAR UP Federal Expenditures Reported
in Schedule of Expenditure of Federal
Awards
Any Written Audit Findings Related to
GEAR UP?Opinion on Compliance
Related to GEAR UP
Was it Audited as a Major Financial
Assistance Program?
GEAR UP Federal Expenditures Reported
in Schedule of Expenditure of Federal
Awards
Any Written Audit Findings Related to
GEAR UP?Opinion Issued Related
to Federal ProgramsFiscal Year
Fiscal Year 2005No GEAR UP Federal Assistance Reported N/A N/A N/A
No GEAR UP Federal Assistance Reported N/A N/A N/A
Fiscal Year 2006No GEAR UP Federal Assistance Reported N/A N/A N/A
No GEAR UP Federal Assistance Reported N/A N/A N/A
Fiscal Year 2007 No $420,406.00 None N/ANo GEAR UP Federal Assistance Reported N/A N/A N/A
Fiscal Year 2008 No $1,202,287.00 None N/ANo GEAR UP Federal Assistance Reported N/A N/A N/A
Fiscal Year 2009 No $1,253,386.00 None N/ANo GEAR UP Federal Assistance Reported N/A N/A N/A
Fiscal Year 2010 No $2,047,716.00 None N/ANo GEAR UP Federal Assistance Reported N/A N/A N/A
Fiscal Year 2011 No $1,147,136.00 None N/ANo GEAR UP Federal Assistance Reported N/A N/A N/A
Fiscal Year 2012 No $1,614,270.00 None N/A Yes by IPA ** $1,423,528.21Yes, Audit Finding No.
2012-01 Unqualified Opinion
Fiscal Year 2013 No $2,636,994.00 None N/A Yes by IPA ** $2,965,712.19Yes, Audit Finding No.
2013-01 Unqualified Opinion
Fiscal Year 2014 Yes by DLA $3,375,364.00
Yes, Audit Finding No. 2014-002, 2014-003,
2014-004 Qualified Opinion Yes by IPA ** $3,089,903.06 No Unmodifed Opinion
Fiscal Year 2015 Yes by DLA $2,850,278.00
Yes, Audit Finding No. 2015-003, 2015-004,
2015-005 Qualified Opinion Yes by DLA ** $2,881,129.40
Yes, Audit Finding No. 2015-001, 2015-002,
2015-003 and 2015-004. Adverse Opinion
Fiscal Year 2016 No $1,000,382.00 None N/A Not completed yet Not completed yet Not completed yet Not completed yet
Legend: **=Amount reported by Mid Central are pass through SDDOE IPA = Independent Public Accounting Firm DLA = Department of Legislative Audit
STATE OF SOUTH DAKOTA MID CENTRAL EDUCATIONAL COOPERATIVE
DEPARTMENT OF EXECUTIVE MANAGEMENT BU R EAU OF FINANCE AND MANAGEMENT
500 East Capitol Ave. Pierre, South Dakota 57501-5007 Voice: (605) 773-3411 Fax: (605) 773-4711
October 2, 2017
Mr. Tim Flannery:
In response to additional conflict of interest questions raised by the Government Audit and Operations Committee at their August 29, 2017, meeting, I am providing the following information.
The employee handbook requires employees and former employees to comply, and failure to comply is a crime. Supervisors inform outgoing employees about it, in particular when they know that the employee may have a need to comply. The conflict of interest laws are outlined on pages 6-8 of the employee handbook. As I previously stated, the employee handbook is located on the desktop of each state employee’s computer. http://bhr.sd.gov/forms/policies/Handbook.pdf
Secretaries and Commissioners are required to complete conflict of interest forms if they have a conflict, just like any other state employee. We believe an annual acknowledgement form stating the Secretary or Commissioner has reviewed the conflict of interest policy, and does not have any conflicts that have not been previously disclosed, is a great idea and we would support that legislation.
Please feel free to contact me with any specific questions.
Sincerely,
Liza Clark, Commissioner Bureau of Finance and Management
Item #3
DEPARTMENT OF HUMAN SERVICES
DIVISION OF DEVELOPMENTAL DISABILITIES
Hillsview Plaza, 3800 East Highway 34
c/o 500 East Capitol Avenue
Pierre, South Dakota 57501-5070
Phone: (605) 773-3438 FAX: (605) 773-7562 TTY: (605) 773-5990 Website: dhs.sd.gov
MEMORANDUM
DATE: December 10, 2015
TO: Case Management Providers
FROM: Dan J. Lusk, Director
SUBJECT: Case Management Provider Enrollment Process
Effective March 17, 2014, the Centers for Medicare and Medicaid Services (CMS) established new Home and Community Based Services (HCBS) rules to maximize opportunities for participants in HCBS programs to fully access the benefits of community living and allow participants to receive services in the most integrated settings. The new regulations establish standards for implementing conflict-free case management services.
The Department of Human Services (DHS), Division of Developmental Disabilities (DDD), is implementing conflict-free case management as a service within the CHOICES 1915(c) waiver and the Community Training Services program. Federal regulations mandate providers of HCBS direct supports for an individual or those who have an interest in or are employed by a provider of HCBS direct supports for an individual, must not provide case management or develop the person-centered service plan.
The DHS/DDD is encouraging qualified providers to enroll to become a provider of case management services. Attached you will find a document outlining the case management provider enrollment process, a case management regional map, and Department of Social Services, Division of Medicaid Services enrollment process documents.
Enrolling qualified providers of conflict-free case management will help the State achieve compliance with new federal HCBS regulations and allow self-advocates more choice in selecting their case managers.
Cc: Daryl Kilstrom, Executive Director Community Support Providers of South Dakota
Item #5
1
Case Management Provider Enrollment Process for
CHOICES Waiver and Community Training Services Participants
The Department of Human Services, Division of Developmental Disabilities is collaborating with the
Department of Social Services, Division of Medical Services, the State Medicaid Agency, to implement
conflict-free case management to comply with new Home and Community Based Medicaid waiver
regulations.
The following timeline will ensure qualified providers are able to participate in the initial rollout of the new
conflict-free case management service:
Publication of Enrollment Process December 10, 2015
Provider Letter of Intent to Enroll Due December 30, 2015
Submission of Documentation Required
through Provider Enrollment Process February 15, 2016
State Review of Provider Qualifications February 16, 2016
of Providers - April 1, 2016
Enrollment of Qualified Providers Begins April 1, 2016
Estimated Transition to Conflict-free
Case Management Begins June 1, 2016
Continuous Qualified Provider Enrollment Ongoing
All interested providers must submit a Letter of Intent to enroll as a qualified provider of conflict-free case
management. The provider shall clearly define if their intent is to enroll for one, multiple, or all of the
identified regions. The letter of intent must be received in the DDD by no later than 5:00 p.m. CST,
December 30, 2015.
The Letter of Intent may be submitted to Colin Hutchison via email at [email protected]. Please
place the following text in the subject line of your email: “Letter of Intent for Provider Enrollment”.
Providers may also fax the letter of intent to 605-773-7562, attention Colin Hutchison.
2
A. Program Overview
1. The CHOICES Medicaid Waiver provides a wide array of services and supports to over 2,600 adults and
children with ID/DD. These services and supports are authorized and provided via a Home and Community
Based Services (HCBS) 1915(c) Medicaid Waiver, which is operated by the Department of Human
Services/Division of Developmental Disabilities (DDD). Services available through the CHOICES
Medicaid Waiver include:
Case Management;
Residential Habilitation;
Day Habilitation;
Prevocational Services;
Supported Employment;
Nursing;
Other Medical/Equipment and Drugs; and
Speech, Language, and Hearing.
CHOICES waiver services, when used in conjunction with non-waiver Medicaid services and other
community-based services and natural supports, are designed to meet the varied needs of people with ID/DD
and their families and assist participants to remain in the community of their choice.
2. Community Training Services (CTS) are state general funded services designed to assist individuals who
require less intensive community supports or who are not eligible to receive CHOICES waiver services.
CTS currently serves approximately 300 people. The three primary services provided under the CTS
program are:
Prevocational Training;
Community Living Training; and
Expanded follow along/support.
3. Case Managers for both the CHOICES and CTS programs work with adults and children who have an
intellectual or developmental disability and their families to:
Develop and implement person-centered planning including utilization of discovery and Person
Centered Thinking (PCT) Tools in accordance with HCBS regulations;
Assist individuals to lead the Person Centered Planning process in evaluating what is important
to and for them;
Evaluate what the individual needs in order to remain successful in the community;
Link the individual to programs and supports that are needed or requested to meet their needs;
Monitor the supports the individual receives to ensure they are meeting his/her needs; and
Advocate for other services that will support the individual’s success in the community.
Case Managers help coordinate services to meet medical, psychiatric, social, nutritional, educational,
vocational, employment, housing, transportation, recreational, legal, and advocacy needs. Case managers
provide support to individuals to actively engage in and direct the person centered plan development
process.
3
The qualified provider’s responsibilities are to recruit, hire, train and supervise case managers of CHOICES
waiver and CTS participants. Federal regulations mandate providers of direct-support HCBS for the
individual, or those who have an interest in or are employed by a provider of direct-support HCBS for the
individual, must not also provide case management or develop the person-centered service plan in
accordance with the new HCBS regulations. Describe how the qualified provider meets these qualifications
and requirements.
Case Management Services will be reimbursed at a fixed rate per 15 minutes of $12.33. The 15 minute
fixed rate provides the total reimbursement for all direct and indirect costs incurred by the qualified provider
in the course of providing one unit of Case Management Services. Based upon historical data, the rate was
established anticipating each case manager will support on average 34 participants with 13 billable units per
month. The initial contract for the provision of Case Management Services shall be one year. The State
may, at its sole discretion, grant rate increases during all subsequent years in which the State elects to renew
the contract. Rate increases will be calculated using the inflationary rate approved for community providers
by the South Dakota State Legislature, unless the vendor and State mutually agree the inflationary rate cap is
unrealistic or unfair.
B. Provider Qualifications
1. Any organization seeking certification by the department must provide:
a) A written statement requesting certification by the department;
b) A copy of the organization's policies that meet the requirements provided in Section C of this
document;
c) A copy of the certificate from the South Dakota Office of the Secretary of State that documents
that the profit or nonprofit entity is organized or recognized under the laws of the state of South
Dakota; and
d) An original copy of the Certificate of Good Standing or an equivalent document from the South
Dakota Secretary of State that is dated within one month of the written statement requesting
certification by the department.
2. A qualified provider delivering case management services must meet the following criteria:
a) Have a signed provider agreement with the division;
b) Have a signed provider agreement with the Department of Social Services;
c) Employ case managers with a degree in the field of human services, social work, sociology,
psychology, or related degree or related field experience; and
d) Be accredited or engaged in becoming accredited by the CQL-The Council on Quality and
Leadership.
C. Provider Service Requirements
The service to be provided by the qualified provider will include the following activities and requirements.
For each item, describe how this activity will be completed for the designated region(s) as shown in
Attachment A – Regional Map.
1. Describe in detail the supervision of case managers and their access to supervisors and managers within
the qualified provider.
4
2. Describe the training the case managers will receive from the qualified provider to carry out the
following duties:
Development of the Individualized Support Plan (ISP) utilizing the state’s Standardized ISP;
Promote and document participant involvement in the ISP monitoring process;
Documentation of team meeting and make sure scheduling facilitates participation of all
members;
Observe, monitor, and document the implementation of the ISP at least quarterly;
Meet minimally, for one face-to-face visit per quarter with each participant;
Ensuring implementation and revisions of the ISP;
Review of critical incident reports;
Review of instances of Abuse/Neglect/Exploitation (ANE), participant health and safety or other
pertinent information;
Submit monthly quality reports summarizing case management activities;
Assist participant in finding paid and unpaid natural supports;
Review and approve assessments conducted by the CSP;
Administer Inventory for Client and Agency Planning (ICAP);
Conduct Person Centered Planning;
Assist participant in selecting services and supports;
Assist participants to identify individual budgets;
Assess individual eligibility status and referring individuals to necessary eligibility resources;
Assist individuals to access integrated community employment;
Review Human Rights Committee (HRC)/Behavior Intervention Committee (BIC) findings to
ensure due process has been afforded; and
Develop an emergency backup plan in the event the case manager is out of the office or is
unavailable when the participant or their family is in need of case management services.
3. Describe the supervision the case managers will receive from the qualified provider in order to ensure
the following duties are in compliance with state/federal regulations:
Applying Person Centered Planning to the development of every ISP;
Monitoring ISP at least quarterly to safeguard proper implementation of ISP;
Presenting ISP monitoring information to team members quarterly;
Coordinating activities regarding the implementation of the ISP;
Ensuring supports, including medication administration, are meeting the health needs, goals,
preferences and desired employment outcomes of the individual;
Conducting onsite visits and ensuring the results are evaluated by team at least annually;
Determine frequency of onsite visits and evaluate annually by team and based upon acuity,
medical needs, available natural supports, risk levels, and support needs;
Initiate and lead the referral process including transitions from institutional settings; and
Providing CTS participants the same case management supports, person-centered planning and
monitoring.
D. Information Technology (IT) System Integration
Qualified providers must implement their own IT system capable of managing participant service records
and demographics, invoicing/billing submittal/review, and State/Federal data reporting requirements
5
generating and submitting electronic claims for payment to South Dakota Medicaid management
information system or the qualified provider must enter into an agreement with a clearinghouse that is
capable of electronic claim submissions. The qualified provider shall grant the State access to all participant
records maintained in their IT system.
The qualified provider’s IT system will provide\accept the following standard HIPAA electronic
transactions, at a minimum, with the South Dakota Medicaid Management Information System: 837 Health
Care Claim and 835 Health Care Payment/Advice. These transactions will meet the requirements set out by
the standard X12N Implementation Guides and the State of South Dakota Department of Social
Services/Office of Medical Services HIPAA Transaction Standard Companion Guide.
The qualified provider’s IT system shall migrate existing data from legacy state systems provided in a State
standard format into the qualified provider’s IT system. The qualified provider’s IT system will be the
operational case management system for the CHOICES waiver and CTS participants. The DDD is working
to procure an IT system that will manage the CHOICES Medicaid waiver and CTS program. The qualified
provider’s IT system must be interoperable with other systems, including the ability to migrate data in a
prescribed format into the new IT system.
Describe how the qualified provider will meet these requirements, including implementation timelines. If
any foreseeable problems are expected with the IT system requirements describe how those problems will
be addressed.
E. Provider Implementation Plan
This plan must clearly define:
Region(s) the qualified provider is enrolling to provide case management services in; West,
Central, Northeast, Southeast;
How the qualified provider will support the entire region, including rural and remote locations, in
which they are applying to become a provider of case management services; and
Any requirements that cannot be met by the qualified provider.
This section should constitute the major portion of the enrollment and must minimally address the
following:
1) A complete narrative of the qualified provider's assessment of the case management duties
to be performed, the qualified provider’s ability and approach, and the resources necessary
to fulfill the requirements. This should demonstrate the qualified provider's understanding
of the desired overall performance expectations;
2) The qualified provider shall describe any foreseeable issues that are anticipated to be
encountered in implementing conflict free case management and how the qualified
provider expects to mitigate/remediate those issues;
3) A description of the provider’s approach to supporting self-directed services;
4) A description of the qualified provider’s approach to utilization of person centered
planning in accordance with the HCBS regulations in the delivery of services and supports
for individuals with ID/DD. Provide a copy of any written policy or procedures;
6
5) A description of the qualified provider’s approach in delivering case management services
to support individuals’ employment outcomes;
6) A description of the qualified provider’s approach in delivering case management services
to support individuals with co-occurring disorders; and
7) A description of the qualified provider’s approach to resolving potential conflict between
multiple providers of direct services.
F. Submission of Enrollment Documentation
Submit completed documentation to Colin Hutchison at the address below or electronically via email
address listed.
Colin Hutchison
South Dakota Department of Human Services
3800 Hillsview Properties Plaza, East Highway 34; c/o 500 East Capitol Avenue
Pierre, South Dakota 57501
Item #6
Description Dr. Schopp's Responses DLA Notes1 Written question #1: Were invoices paid that did not
have required documentation to support payment from the start of drawing down on the grant dollars?
Dr. Schopp's written response dated 8/22/17: Under the GEAR UP grant, when claims were found that did not have required documentation, the supporting documentation was requested before payment was made. If the documentation was not supplied, the claim was denied.
DLA Notes from Dr. Schopp's verbal testimony on 7/24/17: In April 2012 an online record submission system was implemented into which all expenditures, all bills, all contracts, all receipts, all time forms, payment requests, payroll information and match documents were available 24/7. (5:47-5:48) Random sampling of reimbursement request testing occurred (5:49). Secretary indicates they (MCEC) did not get funds from us unless it was approved, invoice comes in, we review the claim, we deny, we approve, we pay (6:06).
It was noted in audit finding 2015-005 of DLA's FY2015 Statewide Single Audit that support for Stacy Phelps and Scott Westerhuis' salaries were reimbursed in a lump sum at the end of FFY14, with no supporting payroll reports on file at the time of DLA's request.
2 Written question #31 : You told the GOAC on July 24, 2017 that your office offered the Department of Education contract independent evaluator position to PerGroup and they backed out of handling the contract position. Who all recommended, offered, and was involved in the approval of that contract to Personal Group (PERGROUP)?
Dr. Schopp's written response dated 8/22/17: This is a mischaracterization of my testimony. I informed the GOAC committee that through a RFP, PerGroup was the organization that was to do the evaluation for the second year of the grant. I did not personally offer this contract to PerGroup. The department followed the normal State request for proposals, or RFP process, which is defined at SDCL 5-18A-7. I would refer you to Tami Darnall's answer on this matter.
DLA Notes from Dr. Schopp's verbal testimony on 7/24/17: First year evaluator was Brinda Kuhn. An RFP was issued to seek a new evaluator. PerGroup was awarded the second year evaluation. PerGroup backed out at the last minute. Brinda Kuhn completed the evaluation for the second year. Third year evaluation was provided by the University of South Dakota. (7:11 - 7:14)
It is DLA's understanding that PerGroup was the evaluator for 2013 and was contracted again for 2014 but withdrew.
3 Written question #46: Please explain the match dollars for Microsoft and why a lawsuit was filed.
Dr. Schopp's written response dated 8/22/17: Refer to cover letter for information regarding match.
DLA Notes from Dr. Schopp's verbal testimony on 7/24/17: March 2015 questions of Microsoft match valuation received by DOE from DLA audit finding. Federal DOE accepts valuation through review with Microsoft (5:58-5:59).
Secretary indicates Federal DOE accepts Federal match (6:49 - 6:54). Secretary indicates civil suit was filed in case Federal Government seeks return of funds in the future (6:53-6:54). Secretary indicated that the lawsuit was 'an insurance policy' that should the Federal DOE reject the match for the Microsoft in-kind match that the liability will be on member schools, not the State DOE. (7:14-7:17)
DLA noted no records of use for this software in an audit finding in both SFY14 and SFY15, with report dates of 2/25/15 and 3/21/16, respectively. In Paul Bachand's response to GOAC dated 8/22/17 he indicates that records for use of this software were destroyed in the fire. Since DOE still had no records on file at the time of the fire (9/16/15), it is apparent DOE did not increase monitoring activities in this area after it was noted in DLA's 2/25/15 report.
In Paul Bachand's response to GOAC dated 8/22/17 he indicates DOE provided 2015 summer honors program syllabus to USDOE as evidence that the Microsoft software was used. DLA's special review dated 5/19/17 indicates that, although Microsoft Programming was a part of the summer program, DLA could not verify that this software was used in the program.
4 Written question #20: When did you first become aware that Nicole Westerhuis was simultaneously the Business Manager of Oceti Sakowin and the Assistant Business Manager of Mid Central?
Dr. Schopp's written response dated 8/22/17: I was not aware of this until it was disclosed in the DLA FY2015 Special Report and Audit of Mid Central, which I first reviewed in May 2017.
This was noted in our audit finding 2015-003 of DLA's FY2015 Statewide Single Audit which was provided to DOE for their response which was received back on 2/8/16 via email with CC to Dr. Schopp, and finally the finding and response was included in the FY2015 Statewide Single Audit with a report date of 3/21/16.
Item #8
At the request of the Committee, Legislative Audit was asked to compare the changes made to the SDDOE’s subrecipient monitoring procedures to the emails from Mr. Campbell. Below are both the slide presented by Secretary Schopp of the subrecipient monitoring procedures implemented by the SDDOE and the applicable dates of emails from Mr. Campbell. Legislative Audit found no inconsistencies between the two.
Slide from Dr. Schopp’s GOAC presentation on July 24, 2017:
Mr. Campbell’s emails: 4/23/12 – Mr. Campbell’s email provides a status update on various items with MCEC and AIII.
8/1/12 – Mr. Campbell’s email states: " ... The Business Manager for Mid Central Education Cooperative (MCEC) is also the CFO American Indian Institute for Innovation (AIII) who is another grant partner."
#10
Follow up information Requested by GOAC at the 8/29/17 MeetingInformation Requested: SDDOE and MCEC Payments to Keith MooreSource: MCEC Accounting System and State's Accounting System and Payroll System (obtained by DLA)
Payments from MCEC to Keith Moore:Entry Date Amount Transaction Description08/14/2012 4,000.00 GEAR UP COMMITTEE CHAIR10/09/2012 4,000.00 GEAR UP STIPEND11/12/2012 4,000.00 GEAR UP STIPEND12/11/2012 4,000.00 GEAR UP STIPEND01/15/2013 4,000.00 GEAR UP STIPEND02/12/2013 4,000.00 GEAR UP GRANT COMMITTEE STIPEND03/12/2013 4,000.00 GEAR UP STIPEND04/11/2013 4,000.00 GEAR UP STIPEND05/09/2013 4,000.00 GEAR UP STIPEND06/10/2013 4,000.00 GEAR UP STIPEND03/05/2015 4,000.00 GEAR UP FEBRUARY PAYMENT04/08/2015 4,000.00 GEAR UP PAYMENT05/13/2015 4,000.00 GEAR UP PAYMENT06/03/2015 4,000.00 GEAR UP PAYMENT07/07/2015 4,000.00 GEAR UP PAYMENT08/10/2015 4,000.00 GEAR UP PAYMENT09/08/2015 4,000.00 GEAR UP PAYMENT
68,000.00
06/13/2008 900.00 LAPTOP PRESENTOR STIPEND06/11/2009 250.00 LAPTOP PRESENTOR STIPEND08/13/2009 147.47 MOORE TRAVEL12/11/2012 173.16 COLLEGE ACCESS TRAVEL12/11/2012 173.16 GEAR UP TRAVEL06/11/2013 92.50 1/2 COLLEGE ACCESS TRAVEL06/11/2013 92.50 1/2 GEAR UP TRAVEL11/11/2013 113.75 COLLEGE ACCESS TRAVEL11/11/2013 277.02 GEAR UP TRAVEL04/11/2014 229.07 GEAR UP TRAVEL08/06/2014 151.27 GEAR UP TRAVEL07/07/2015 690.70 GEAR UP TRAVEL08/10/2015 599.51 GEAR UP TRAVEL09/08/2015 (9.00) GEAR UP - REDUCE TRAVEL
3,881.11
Payments from State of South Dakota to Keith Moore as vendor:* None noted as vendor*
#10
Gross salary payments for Keith Moore as State of South Dakota employee:Fiscal Year Salary
2006 54,918.03 2007 60,123.12 2008 61,926.72 2009 63,784.56 2010 13,288.45
Hire Date: 07/05/2005Term Date: 08/23/2009
October 3, 2017
To: Government Operations and Audit Committee
From: Martin L. Guindon, Auditor General
Subject: Auditor’s responsibility for reporting fraud to law enforcement
As requested by Senator Stace Nelson during the August 2017 Government Operations and Audit Committee meeting, I am providing information regarding an auditor’s responsibility for reporting fraud discovered during a financial and compliance audit to law enforcement .
Audits of governments in South Dakota are required to be conducted in accordance with auditing standards issued by the U.S. Government Accountability Office. Those standards require that when the audited entity’s management fails to satisfy legal or regulatory requirements to report known or likely fraud to external parties specified in law or regulation (such as law enforcement), auditors should first communicate the failure to report to those charged with governance (governing board). If the audited entity still does not report this information to the external parties, then the auditors should report the information directly to the specified external parties.
The legal requirement in South Dakota to report felony fraud is contained in SDCL 22-11-12 which states:
“Any person who, having knowledge, which is not privileged, of the commission of a felony, conceals the felony, or does not immediately disclose the felony, including the name of the perpetrator, if known, and all of the other relevant known facts, to the proper authorities, is guilty of misprision of a felony. Misprision of a felony is a Class 1 misdemeanor. There is no misprision of misdemeanors, petty offenses, or any violation of § 22-42-5.1.”
When we identify fraud in our work, we advise management and governing boards of their responsibility to report fraud to the proper authorities. We have never had a governing board fail to report known felony fraud to law enforcement.
Item #12
