PIERRE | South Dakota Secretary of Education Melody Schopp said she “was not aware of any fraud, misappropriation or criminal activity” prior to taking the GEAR UP grant away from an educational cooperative in September 2015 and the audits that followed.
Schopp provided written answers this week to questions sent by the Legislative Government Operations and Audit Committee.
Panel members are looking deeper into management of the federally funded program in South Dakota, after the state Department of Legislative Audit determined nearly $1.4 million couldn’t be tracked down.
Legislative auditors discovered large amounts of money moved back and forth between the bank account for Mid-Central Educational Cooperative at Platte, which held the GEAR UP contract, and several nonprofit agencies.
Schopp’s denial of prior knowledge about criminal activity in GEAR UP appeared at odds with other answers she gave to legislators in the same packet of information.
Those included emails from the Native American education director she fired in 2011 and incidents she described from 2012 and 2013 involving the first director she hired. He, too, resigned.
GEAR UP is a federally funded program that attempts to make students from lower-income households aware of education opportunities available after high school.
The U.S. Department of Education operates GEAR UP on a reimbursement basis. The state Department of Education submits what are determined to be allowable expenses to the federal department for payment.
Mid-Central was the sub-recipient of the grant in South Dakota. Black Hills State University at Spearfish now manages GEAR UP.
The answers Schopp gave to legislators this week often indicated that the questions were based on faulty premises.
While she denied knowledge of criminal activity, her answers showed she knew there were problems.
In one instance, Schopp referred to emails about GEAR UP and another program sent more than seven years ago from then-director of Native American education, LuAnn Werdel.
Schopp, in her first day as secretary on Jan. 10, 2011, fired Werdel.
Werdel sent an email later that day. Werdel warned Schopp about problems in GEAR UP and College Access, including mixing of data.
Werdel then apologized in emails Jan. 11.
In another instance, Schopp told legislators about the actions of Roger Campbell. He replaced Werdel as Native American education director in March 2011.
Schopp wrote that Campbell expressed concerns about GEAR UP in spring 2012.
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She said one of Campbell’s points was the business manager for Mid-Central was chief financial officer for a nonprofit known as AIII. The nonprofit contracted with Mid-Central to deliver GEAR UP services.
The business manager was Scott Westerhuis.
On Sept. 17, 2017, Westerhuis allegedly killed his wife, Nicole Westerhuis, and their four children, set their house on fire and then committed suicide. Nicole Westerhuis was an assistant business manager at Mid-Central.
The shootings and fire came hours after Schopp had telephoned Mid-Central director Dan Guericke on Sept. 16, 2015.
Schopp told Guericke in that conversation she wasn’t continuing the state’s GEAR UP contract with the cooperative.
Guericke, GEAR UP operations director Stacy Phelps and Stephanie Hubers, another assistant business manager at Mid-Central, now await trial on state criminal charges related to GEAR UP wrongdoing.
Schopp told legislators she could “specifically” recall an in-person meeting that involved Campbell, Guericke, Westerhuis, Phelps, her and several other staff members from her department.
She said the meeting became “very heated” and involved what she described as personal attacks on both sides.
She said the back and forth was “not only counter-productive, but also odd” because Phelps had suggested Campbell as a candidate for the position of Native American education director.
Schopp said Campbell’s suggestions led to increased oversight and accountability for Mid-Central. He resigned Feb. 28, 2013.
Schopp testified to the legislative committee on July 24 of this year. The panel on July 25 invited Schopp and three others to testify at its next meeting, scheduled for Tuesday.
None of them plan to meet with the committee, according to letters on file at the Legislative Research Council. The three others are Tamara Darnall, who is chief finance officer for the state Department of Education; Brinda Kuhn, a consultant who helped prepare the original grant application and later participated in the program’s evaluation; and Randy Schoenfish, whose accounting firm conducted annual audits of the Platte-based cooperative prior to 2015.
Darnall answered some of the committee’s questions.
Kuhn didn’t answer any, according to a letter from her attorney.
Schoenfish answered committee questions, except where they dealt with pending court matters. He is the father of state Rep. Kyle Schoenfish, R-Scotland.
Mid-Central ceased operations June 30.
Twelve school districts that were members of Mid-Central formed a new cooperative named Core. It operates from the same building Mid-Central previously used.