Entries Tagged 'Gear Up' ↓

Were the Gear-Up trials just a ‘SHOW’?

So two of the accused were acquitted and one of them got a heck of a plea deal. The problem though with these trials were they only focused on the individuals who worked for the organizations and NOT the consultants. It also swirled around a very small amount of money in the bigger scheme of things. (The trials focused on around $1 million when in essence around $60 million is missing).

Like EB-5, it seems the ‘dead guy’ was blamed. But unlike EB-5, dozens of consultants walked away with millions and little to show for the work they did.

As a team of USD Political Science students showed on the big board of yarn, there were many players in the Gear-Up scandal. Why weren’t they dragged into a courtroom? Were these 3 mini cases simply a deflection of the bigger scammers? And by the State (AG Jackley) losing these cases a way of putting this all to bed?

I just find it a little odd that the small players (and dead guy) were put on trial yet NONE of the consultants who took millions in Federal Grant money had to appear in a court room.

The Gear-Up scandal stinks to high heaven and it is a distinct possibility the real crooks in this matter got away.

Gear Up Thesis by Anna Madsen

Click to enlarge

This thesis just recently got published and is available at USD in hard copy. I have a PDF of the document here (DOC: GEAR-UP-THESIS)

Here are some highlights of the Thesis;

The Misspent Youth of South Dakota Native American Students:

An Analysis of the Gear Up Grant Program in South Dakota

While Native Americans constitute about 9.00% of the total population of South Dakota, they represent only 3.16% of the student population in Board of Regents (BoR) institutions.1

GEAR UP (Gaining Early Awareness and Readiness for Undergraduate Programs) is a federally funded grant program the U.S. Department of Education established in 1998.

In the original grant application, a conflicting budgetary concern is clear. On page e3, the federal funds amount requested for “Consultants & Contracts” is $959,188 per year, totaling $5,755,128 or 83.12% of the total amount requested.11 The “Scholarships/Tuition Assistance” category requested $50,000 per year, totaling $300,000 or 4.3% of the total amount requested.12 In the following budget for matching funds to be provided by non-federal sources, the pattern is similar. Consultants and contracts amount to $180,000, whereas scholarships and tuition assistance account for $90,000 (the total matching funds are $723,000).13 As noted previously, of the awarded grant money, at least 50% was required to be used for scholarships, unless a waiver were requested. South Dakota’s 2005 application did not request a waiver for the scholarship requirement.14

Following the arrival of the first GEAR UP grant in South Dakota, many colorful personalities soon populated the GEAR UP world. The personal and professional relationships between and among these people rapidly grew into a tight web. Some observers see these relationships as entirely professional and beneficial – especially in a lightly populated state where educational experts may be difficult to find. Others see them as blatant conflicts of interest and reject the argument that South Dakota has to tolerate close relationships due to sparse population and a lack of professionals in technical education areas.

Additionally, the 2011 report showed the GEAR UP program lacked in special education services. According to Michael Wyland of Nonprofit Quarterly,

“Disturbingly, while the GEAR UP program reported serving several thousand low-income, predominantly Native American students prepare for success in postsecondary education, not a single student receiving special education services was served during the 2005-2011 period. We now know the original grant application stressed equitable participation in program services and even documented the percentage of special education students in each of the two dozen schools to be served.”58

Also in the letter to GOAC, Rick Melmer stated that he began his two-year employment with MCEC in 2013 (after he left USD) where he worked on three contracts with CCSSO, the SDBoR, and the GEAR UP program respectively. In June 2013, the MCEC board approved a one-year contract for $185,000 with Melmer to serve as a senior advisor, and approved a similar contract the following year for $233,000.69 Between 2012 and the termination of MCEC in June 2017, MCEC paid Melmer at least $350,000 through contracts directly among MCEC, CCSSO, and the SDBoR that were not included in Melmer’s two employee contracts for 2013-2014 and 2014-2015.70

LuAnn Werdel, the director for the SDDOE Office of Indian Education at the time, sent Schopp an email on January 10, 2011, regarding Schopp’s decision to end Werdel’s employment with the SDDOE Office of Indian Education. In the email, Werdel references several issues with the management of the GEAR UP and College Access grants by MCEC. In her email, she states:

“By ending my appointment as an exempt employee of the Department of Education you have effectively sided with people who have no integrity or morals when it comes to managing grants and federal funds. I have told you over and over what Stacy Phelps and Mid Central is doing with the GEAR UP grant and College Access grant…To conclude, you know only too well that I have been

frustrated with the daily operations of the SD GEAR UP Grant and the SD College Access Grant. In front of everyone last Friday at the last College Access meeting, Stacy Phelps directed all College Access staff to send College Access data to his GEAR UP data lady, Misty Mousseau. This co-mingling of data is illegal. Stacy Phelps remains Project Coordinator in charge of daily operations. This arrangement did not work previously and I’m not sure why we would expect a different result. He is also designated 100% GEAR UP and once I showed you and Mr. Oster the budgets a couple of months ago you were appalled. What has changed? …You told me last week not to worry so much about the grants and to focus on large policy issues-how can one focus on other issues when the foundation of the Office of Indian Education is based on unethical foundations.”111

At about 6:00 p.m. that day, Schopp and Guericke connected over a phone call, in which Secretary Schopp informed Guericke that she was terminating the SDDOE’s management partnership contract with MCEC for the GEAR UP program.127 That same night, just hours after the phone call between Secretary Schopp and Guericke, local Platte residents reported a fire at the property of Scott and Nicole Westerhuis. Scott and Nicole Westerhuis and their four young children perished. Based upon Division of Criminal Investigation (DCI) findings, South Dakota Attorney General Marty Jackley revealed that Scott Westerhuis murdered his wife and their four children with a shotgun before setting the house on fire and shooting himself.128 The news of the murder-suicide shocked the community of Platte and the entire state of South Dakota.

The continuation of these problems prompted Secretary Schopp’s cancellation of the grant contract with MCEC. A few days later, on September 21, 2015, Secretary Schopp sent a formal letter to Dan Guericke outlining the eight specific reasons for termination. They are as follows:

“(1) Lack of supporting documentation and improper documentation for match, resulting in a significant shortfall in match;

(2) Lack of fiscal capacity including lack of fiscal control and improper governmental accounting procedures;

(3) Lack of knowledge of Generally Accepted Accounting Principles (GAAP) or

failure to implement GAAP procedures;

(4) Lack of internal controls

(5) Conflict of interest and failure to disclose related parties;

(6) Lack of project oversight;

(7) Lack of oversight on school subgrants; and

(8) Lack of documentation for grant activities under OMB A-87.”131

At the AG’s press conference, questions arose about a missing safe that witnesses claim should have been in the Westerhuis’s house. The safe may hold important financial documents regarding MCEC, other organizations, and people involved with GEAR UP. According to a KELOLAND News report in November 2015, “Jackley believes it was most likely destroyed in the fire, but could have been stolen or moved somewhere else by Scott Westerhuis.”

Ten years after its inception in 2005, the GEAR UP grant did not have an effective system of collecting data or consistently tracking performance metrics. South Dakota simply does not know, through explicit data, whether the millions of dollars of grant funds helped Native American students prepare for or succeed in college.

The South Dakota GEAR UP mission statement is to “increase the number of low-income Native American students that are prepared to graduate from higher education.”164 For both GEAR UP grants, South Dakota received federal and statematched dollars totaling over tens of millions of dollars from 2005 through 2017. While the intrinsic benefits of the GEAR UP program for some students may exist, the hardline statistics of Native American students in Board of Regents universities barely fluctuated. The achievement gap between Native and non-Native students in South Dakota is very real. The GEAR UP grant program is a clear example of how “throwing money” at a problem without adequate oversight and checks and balances fails to accomplish its noble goal. In the end, good intent was lost between the dollar signs.

Are grant programs like GEAR UP, College Access, and Wakan Gli effective? Does South Dakota need to approach the achievement gap in a fundamentally different way? While many factors are at play, the above statistics suggest that the achievement gap is not closing. The state of South Dakota needs to reflect deeply on how it serves this at-risk and long neglected segment of the population.

What we know about Gear Up

When I hear someone like Russ Janklow say that Noem is running a negative campaign against Jackley, you just kind of scratch your head. While I don’t agree with everything Noem has said in her campaign, pointing out the truth about the DCI coverup is not negative campaigning, it’s the truth. Why doesn’t Jackley bring up the millions in farm subsidies that Noem’s family has received over the years?

Much of the same could be said about his other scandals, like EB-5, the Mette Rape case or Gear Up.

Here’s what we know for sure about Gear Up;

• Barely any Native American students benefitted from Gear Up.

According to Michael Wyland of Nonprofit Quarterly,

“Disturbingly, while the GEAR UP program reported serving several thousand low-income, predominantly Native American students prepare for success in postsecondary education, not a single student receiving special education services was served during the 2005-2011 period. We now know the original grant application stressed equitable participation in program services and even documented the percentage of special education students in each of the two dozen schools to be served.”

• When Jackley was questioned about the missing safe at the Westerhuis’s house that could have important MCEC information in it, he said, “Jackley believes it was most likely destroyed in the fire, but could have been stolen or moved somewhere else by Scott Westerhuis.”

• Gear Up started in 2005, the GEAR UP grant did not have an effective system of collecting data or consistently tracking performance. South Dakotans simply do not know, through data, whether the millions of dollars of grant funds helped Native American students prepare for or succeed in college.

• Whatever happened to the missing millions in consulting fees?

When will Jackley really investigate this mess? If ever? Just another scandal he continues to sweep under the rug. Hopefully he will have more time on his hands after June 5th.

Vermillion, Gear Up and Kolaches

First off, a big shout out to Frank Kloucek for the excellent Kolaches, and the Old Lumber Company in Vermillion for the drinks and food.

CMB (Cameraman Bruce) and I headed to Vermillion last night to see the Folklore of the Gear-Up Wall for ourselves and the explanation of ‘what might have happened’ by the USD senior poli-sci class. While the students were NOT there, their gracious professor worked us through the yarn.

Hopefully we can edit this video to make everyone understand, somehow.

It’s gearing up to be an interesting week

Someone needs to tell Representative Schoenfish there is no ‘I’ in Teamwork

I have done a lot of things for SD, except answer key questions about the GearUp program

Kyle wants you to know all the great things HE did in Pierre this last year (notice he leaves out his stellar performance as GearUp’s auditor);

I have been appointed to the workforce housing summer study by the legislative executive board. My experience as a CPA working on muncipal audits and housing/rental components of income taxes will be beneficial on the committee.

Maybe these are some things that Kyle should be answering;

1)How long has Schoenfish and Company conducted audits of Mid-Central Educational Cooperative?

2)How many years were you Kyle Schoenfish personally involved with doing the audits and what years where they?

3)What was your response Kyle as an auditor to the discrepancies in the monthly balances shown in Mid-Central’s financial reports from June 2011 through March 2014?

4)What other irregularities did your audits find in Mid-Central’s finances that might be related to the improper use of funds that has led to criminal charges for Mid-Central personnel?

5)When did you first become aware or suspect in your audits of businesses associated with the  Westerhuis’s of what SD Attorney General has described as misappropriating “at least” $1.2 Million from the state and federally funded GEAR UP program?

6)When, to whom, and how did you report these $1.2 misappropriations?

7)When did you first become aware or suspect what SD Attorney General describes as 17 illegal secret contracts let by Dan Guericke, worth $3.8 million, that were not lawfully approved? 

8)When, to whom, and how did you report these $3.8 million worth of illegal contracts?

9)When did you first become aware or suspect what SD Attorney General reports was evidence in the Gear Up  financial records of over $300,000 of “…misuse, or misapplication of monies designated for Native Americans and their education.” By Stacy Phelps, Dan Guericke, and Stephanie Hubers? 

10)When, to whom, and how did you report $300,000 of “…misuse, or misapplication of monies designated for Native Americans and their education?”

Where was the oversight of Gear Up from the state, the education dept, the Feds and the auditor Schoenfish?

If you look at the audit, you begin to scratch your head;

A new audit report shows that a now-dead couple who helped administer South Dakota’s GEAR UP college-readiness program made unauthorized withdrawals totaling more than $7.8 million from the Platte-based educational cooperative where they worked.

The Department of Legislative Audit report released Friday says much of the money was returned, but roughly $1.4 million remained missing after their deaths in 2015.

How could all of the state organizations and independent auditor miss this especially since it was apparent for years that NONE of the kids were going to college? If they think the only ones involved are the three clowns that are still alive from Mid Central and Scott Westerhuis and his wife, they are sadly mistaken. I hope when this goes to trial they spill the beans and name everyone involved in this scam, including the State Department of Education and Kyle Schoenfish, the auditor. You would honestly have to be the worst accountant on the planet to not catch this much missing and misappropriated money or you were bribed. Both may be true.

Online Petition to push for Gear UP hearings

On September 17th, 2015, South Dakotans awoke to horrific news stories of the entire 6-member Westerhuis family discovered dead in their burnt out home in Platte, brutally killed by shotgun blasts.

SIGN THE PETITION

News reports have confirmed these deaths are at the center of acknowledged corruption in the mismanagement and misuse of taxpayer monies given out in grants by the SD Department of Education. Reports are that Department of Education administrators have known for years that these taxpayer monies were not being handled properly by its contracted agent MidCentral Education Cooperative. News reports identified former and current public education officials as having received large amounts of taxpayer monies via these programs administered by MidCentral Education Cooperative; however, these programs cannot identify any Native American children who benefited from these monies specifically designated for these needy youth.

South Dakota statutory law, 2-6-2. Empowers the Government Operations and Audit Committee (GOAC) to inquire and review “any phase of the operations and the fiscal affairs of any department, institution, board, or agency of the state..” With the ability under 2-6-4. to “examine all records and vouchers, summon witnesses, and thoroughly examine all expenditures and the general management of each department.

The MidCentral Education Cooperative was contracted and answerable to the South Dakota Department of Education to administer these taxpayer monies. They were agents of the Department of Education and a contractual entity of the Department of Education. Accordingly, the Joint Legislative GOAC has authority to conduct hearings and demand answers of the Department of Education and its agents in this admitted corruption surrounding taxpayer monies, in order to seek corrective legislative actions to address this infamous corruption of SD government.

We, the signatories of this petition, hereby call for Senate President Pro Tem Brock Greenfield (R-Clark), Senate Majority Leader Blake Curd (R-Sioux Falls), Senate Minority Leader Billie Sutton (D-Burke) House Speaker Mark Mickelson (R-Sioux Falls), House Majority Leader Lee Qualm (R-Platte), and House Minority Leader Spencer Hawley (D-Brookings) to require immediate public hearings be held by the GOAC into this notorious corruption responsible for the murders of Kailey (9), Jaeci (10), Connor (14), and Michael (16) Westerhuis.