November 30, 2022

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Financial audit investigation into South Dakota Corn finds evidence of business mismanagement, no fraud

A financial audit investigation into the state’s major agriculture team observed evidence of small business mismanagement procedures by its former government director and legislative director.

Bob Rauenhorst, a qualified fraud examiner at ELO Prof, an accounting provider in Mitchell, tackled the South Dakota Corn Utilization Council throughout their meeting Thursday, stating that the group’s longtime government director Lisa Richardson and legislative director Teddi Mueller did not act in the finest interest of the council.

It was located that Mueller had authorized the disbursement of SD Corn Utilization cash when she was neither an staff of the organization or a registered agent of the council, Rauenhorst reported. She also employed her husband’s promoting enterprise for sure things to do as a result of the council, heading in opposition to South Dakota state statute relating to oblique benefits.

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“For Teddi Mueller to authorize these expenditures is a violation of condition legislation mainly because her spouse being the theory officer and CEO, she would’ve experienced an oblique benefit,” Rauenhorst stated.

How did we get here?

In August as aspect of an Argus Leader investigation, it was located that South Dakota Corn experienced been warned it lacked simple controls for money management more than a lot more than a ten years.

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Among 2010 and 2020, economical reviews from accounting company Eide Bailly found years of materials weaknesses.

South Dakota Corn hired Brett Koenecke, a Pierre law firm, to obtain an auditor to glance into the group’s monetary information in August. Richardson and Mueller were being suspended on July 15 and resigned afterward.

Thursday’s meeting was the end result of a multi-month investigation into the financial decades of 2019, 2020 and 2021.

From funding a husband’s advertising and marketing company to unclear career descriptions

All through Rauenhorst’s testimony, he explained that Mueller experienced employed her husband Jay’s advertising business the 3 yrs that had been beneath investigation. Invoices for the promoting enterprise ranged from $135,750 to $47,730 and $80,750.

Under state regulation, this is unlawful simply because Mueller would’ve indirectly benefited and state workforce are not permitted to have a company deal with their partner, Rauenhorst reported.

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“… That by her authorizing expenses to her husband’s corporation, she did derive a gain from those people,” he stated.

It was also identified that in quite a few invoices, there were buys for iPads, earbuds, wireless earphones and other digital gadgets that arrived with four months free of charge of Apple Audio and Apple Information. The incentives ended up redeemed to Muller’s husband’s e mail deal with, Rauenhorst explained.

Even though Mueller was involved in authorizing the payments to be distributed, Richardson was concerned in creating the monthly money statement report. Richardson would give the report to their bookkeeper detailing she should “simplify” it.

Richardson, who served as govt director of SD Corn for yrs, also did not have a evidently described occupation description, Rauenhorst claimed.

At the conclude, Rauenhorst created several suggestions which the board explained they had currently executed such as building obvious suggestions for the government director situation.

SD Corn glad with success

Right after the conference, the Vice President of the South Dakota Corn Utilization Council, Chad Blindauer, said he was content with the final results of the investigation.

“Moving forward, we just get thoroughly staffed and get back again to organization with investigate projects and currently being liable with these check-off pounds,” he claimed.

Blindauer stated the council is not able to press fees and alternatively it is on the condition to do so.

The audit report will be created general public on the point out legislature’s web page.

Stick to Annie Todd on Twitter @AnnieTodd96. Get to out to her with suggestions, questions and other community news at [email protected] or give her a contact at 605-215-3757.

This report initially appeared on Sioux Falls Argus Chief: South Dakota Corn fiscal investigation finds mismanaged company