This interview originally aired on "In the Moment" on SDPB Radio.
"In the Moment" brought you the voice of Rich Sattgast, South Dakota's state auditor. Listen to his full interview here.
Now, you'll hear the voices of our Dakota Political Junkies with their analysis of that conversation.
Jon Hunter is publisher emeritus of the Madison Daily Leader and a member of the South Dakota Newspaper Hall of Fame.
Michael Card, Ph.D., is a political scientist and professor emeritus at the University of South Dakota.
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The following transcript was auto-generated and edited for clarity.
Lori Walsh:
All right. We just heard South Dakota State Auditor Rich Sattgast. Now we are going to welcome the voices of our Dakota Political Junkies for the day with some analysis of this.
Jon Hunter is publisher emeritus of the Madison Daily Leader and a member of the South Dakota Newspaper Hall of Fame.
And Michael Card is a political scientist and professor emeritus at the University of South Dakota.
Dr. Card, welcome. Thank you so much for being here.
Michael Card:
Thanks for inviting me.
Lori Walsh:
Jon Hunter, welcome back.
Jon Hunter:
Thanks, Lori.
Lori Walsh:
What stands out to you about what you just heard Auditor Rich Sattgast say in that interview? There's a lot there, but let's begin.
Jon?
Jon Hunter:
I appreciated Rich's comments. And he, I think, publicly admitted there are weaknesses in the system and that some of them may be in other offices, some may belong in his. And that there needs to be pretty serious reform. And I totally agree with him.
I appreciated his honesty. I was hoping, as I was anticipating, that he wouldn't say, "Nope, there's not a problem." This is a one-time thing. He didn't do that, and I appreciate his candor.
Lori Walsh:
I'm going to get to something that you wrote in the Madison Daily Leader here in a minute with your editorial with a bigger picture.
But first, Mike Card, what stood out to you from that interview as well?
Michael Card:
Well, it's easy to point fingers at somebody else, and I heard a little bit of that in Mr. Sattgast's discussion. The entity that he didn't mention much is the Department of Legislative Audit, which has responsibility for financial and compliance audits for both the state agencies and for cities and counties and other taxing units. But the other part they're supposed to do is set up internal controls and audit for internal controls.
So that form of program evaluation is apparently not taking place, which is part of the culture of the organization because it's the head of the agency who's responsible for setting up the culture that we set up internal controls. We monitor whether they're being followed and if the shortage of staff contributes against that or takes away from the ability to do that. But that still has to be done at least every year.
And everyone needs to be reminded who's handling money, who's handling authorizations, whether it's in the university system handing out degrees, whether it's in the Department of Revenue, giving titles, licenses, and this could affect every state agency.
But there is much to be done and not the least of which is the auditor doesn't have control over the accounting system, which I would think is a major problem because can BF Bureau of Finance and Management cut a check without the auditor knowing. Treasury would eventually figure it out? Right, because they have to reconcile the account.
Lori Walsh:
Deep breath.
Jon, I keep coming back to who does the buck stop with? Who do voters hold accountable for this? If every single one of these people can say, rightfully so, that the buck stops with a lot of people, there are a lot of tentacles to state government. There are a lot of tentacles to oversight.
We have other requests out for interviews to see if people will come and talk to us, including the auditor general. What's the title exactly? Auditor general?
Michael Card:
Auditor general, Department of Legislative Audit.
Lori Walsh:
Yes. So we have a request out this morning that we sent in for a follow-up interview with them, as well.
But Jon, first of all, should the buck stop with one person? Do we need someone who is going to step out and say, "I am going to root this out and solve this problem, or just a whole bunch of people getting together and trying to figure out what's going on?" Because that doesn't seem very satisfying to a lot of people who want to pin something to the wall, or someone to the wall as the case may be.
Jon Hunter:
I'm usually the one who mixes the metaphors, Lori. Now that you've done it, I feel a lot better.
So it is difficult to pin past acts on one person, I will say that. And without satisfying those who really want a person to point the blame to, I think it is hard.
But the solution I think is very much a person thing. There needs to be someone who takes a strong leadership position, preferably the governor. But there are other opportunities to say, look, this is a real problem in South Dakota. This is a big problem that needs to be fixed. I'm going to put my career on the line for this. I'm going to call everyone I know. I'm going to ask every lobbyist to get involved in this. I'm going to drive town to town and talk to legislators and say, "It is my mission to fix this, and it can be done."
It'd be great if the governor would do that. The governor sets the tone at least intentionally or unintentionally for all of state government for all the 10,000 plus, I don't know, 12,000 however employees there are. The governor sets the tone. So if the governor of any time in the last 13 years when the Lonna Carroll thing happened that the governor said, "I'm going to make sure, we're going to have a moral, ethical and honest state government. The role of state employees is to serve the public. It's not for personal gain. And I'm going to make sure all my cabinet secretaries know that, and I'm going to make sure their department heads know that. And I'm going to preach that at every Lincoln Day dinner." And you can set the tone for that.
Now, that's that one-person responsibility you're talking about. Then it really does have to spread out that you have to have people willing to write policies and procedures that will satisfy the kinds of internal controls that Mr. Sattgast was talking about. Then you have to have department heads who say, "Yes, we're going to follow these things. Remember we set them up in that meeting last summer? We're going to follow those." And they said, "You know what, as department heads, we want to welcome the auditors to our department. They're not going to be an annoyance but something that we're looking forward to, not that we shun personally."
We say, "Look, come on in. You can help boost the morale of this state department by doing a great job, by finding those very few bad actors." The majority of state employees are, I would guess, very hardworking and honest. I would think they would want the bad rooted out. It's great for morale to find and clear those out. It's not great that right now they're trickling out and state employees think, "Where else is this occurring?"
So I'm getting a little away from your question, Lori, but that one-person thing, I think it's hard to put a blame on that, but one person needs to take a leadership role and spread that mantra through all of state government.
Lori Walsh:
What else needs to happen?
Michael Card:
Well, I still think that the accounting system shouldn't be under the control of the Bureau of Finance and Management. It should be under those who are looking at the expenditures to see if they're according to appropriations by the legislature and that those expenditures are made according to what the legislature authorizes. That's the state auditor's job. But it also falls upon an auditor general and the Department of Legislative Audit to reinforce and to develop those internal controls.
We've all been in organizations or groups where, well, you choose, let's choose together, and if everyone's involved, then no one's really in charge and bad things can happen. And I feel for state employees. During my time in state government, I did not run across to anyone who was in any way, shape or form out for themselves. And I think many people are going to be blamed just by association of being a state employee.
Jon Hunter:
And that's unfair, but it's what it is. And it's patently unfair because people didn't root those out. So it was a preventable unfairness.
Michael Card:
Right.
Lori Walsh:
And this feeds into the we don't have enough staff.
Michael Card:
Right.
Lori Walsh:
Nobody wants to work in Pierre. It's very hard to find somebody to come take a job in Pierre. I hear that again and again.
What's wrong with Pierre? Pierre's a great community. What is happening in Pierre that people don't want to work there? Mike, you can say the same thing with Vermilion. Everybody wants to come to Sioux Falls.
Michael Card:
Right. Well, it's a smaller community and there aren't the amenities. And one thing we've learned from other states in terms of economic development is the amount of amenities that are associated with either geographic features or larger retail outlets. That's where people flock to. And if you're into hunting and fishing, Pierre's a great place to be.
If you want to be in a university town, Vermillion is a great place to be. As is Brookings, and all of our great universities in South Dakota, those are amenities people go for, but they don't attract everybody.
Lori Walsh:
And we love small-town living. Many of us do. A lot of people in Sioux Falls grew up in small town, and they go home the second that they can to these small towns across the state.
Is it economic development? Now we're getting on a different highway here, but again, it's about more than just saying, come move to South Dakota for our freedom. It's about giving people communities and amenities that sustain them and jobs that pay well and have good benefits to them, for people to take these jobs.
Michael Card:
And finding someone who's interested in public service as opposed to self-enrichment. But there are people out there that want to do that.
Lori Walsh:
Say that again. As a public radio journalist, I want you to say that again, Mike.
Michael Card:
Well, I think the issue that we're dealing with is there is a staffing problem. And part of the staffing problem is legitimately to implement broad-based internal controls is going to take more people. You could always make it so that there is no fraud if you're willing to spend the money to make sure there's no fraud. One way to do that is to keep people from spending money.
But then you have your mission. And that's why I use the term program evaluation because it's all the way from who are we supposed to be serving? What is the outcome that we're looking for? But along the way, as a policies and procedures audit that takes place as the middle step. What are we trying to do? What does success look like? Then we start looking, do we have policies and procedures in place? Are we reaching the right people? Are we producing the outcomes? And every bit of a problem like this is probably most bad reviews, it's going to get repeated 10 times more than a positive compliment would.
Lori Walsh:
Right.
Jon Hunter:
There is—
Lori Walsh:
We got two minutes left, Jon.
Jon Hunter:
Fair enough. There is a state-of-the-art methodology to doing this well, and we can learn from others. Whether it's in private industry or other state governments or whatever there is. Some involve technology that wouldn't require as many people, but then you need to obviously audit that to make sure that the software doesn't get manipulated and so forth. And so Rich Sattgast, I think, effectively talked on that.
But I want to emphasize that there is a right way of doing this and it's available to us. And if someone takes a leadership position, it can be done. We can be the shining star among states and show the way to run state government to prevent fraud. That is available to us if we want it.
Lori Walsh:
We can't throw up our hands and just say, "Oh, this is going to happen."
Jon Hunter:
Yeah. Concession is the worst thing, or apathy is the worst.
Lori Walsh:
EB-5, Gear Up, DSS scandal, Division of Motor Vehicles, misuse of funds and the 10 that we haven't discovered yet because we're not really effectively checking, that we might find out next month for all I know. So we've got a lot of unanswered questions and a lot of uncomfortable people. And what I'm hearing you say is leadership, looking at those systems that Auditor Sattgast said are perhaps arguably misplaced and need to be reevaluated.
Jon Hunter:
Well done, teammates.
Michael Card:
Yes.
Lori Walsh:
This is not the last time we're going to have this conversation. All right, we're going to wrap up with our Dakota Political Junkies. We've had Jon Hunter and Mike Card with us. We'll see you guys next time.
Jon Hunter:
Great. Thank you.
Michael Card:
Thanks.
