Joshua Haiar, South Dakota Searchlight
Two state departments victimized by the allegedly criminal behavior of some employees said Monday they are implementing reforms, including a full-time internal control officer and an anonymous tip line for employees.
During a meeting in Pierre with the State Board of Internal Control, officials from the Department of Social Services and the Department of Revenue outlined the new measures.
“We have been inspired to rethink our internal controls, ensuring they are more robust and frequent,” Social Services Secretary Matt Althoff said.
A former employee allegedly stole $1.8 million from the department’s Division of Child Protection Services over a 13-year period. She allegedly submitted financial assistance requests for children in the state’s care, intercepted the checks, deposited them into an account she controlled, and transferred the money to her personal account.
The former employee, Lonna Carroll, is charged with aggravated grand theft.
Althoff said new measures include stricter supervisory approval processes, such as a two-person protocol to ensure no single employee has unchecked control over financial transactions. Another addition is the appointment of a full-time internal controls officer, a role created to continuously monitor and refine the department’s processes.
Similarly, the Department of Revenue is taking steps to address internal vulnerabilities after a former employee allegedly used her position to create 13 fake vehicle titles, which she then used to secure approximately $400,000 in loans. That employee, Sandra O’Day, has since died. Another former Department of Revenue employee is being investigated for separate but similar allegations, according to The Dakota Scout.
Kristen Jasper, chief legal counsel for the Department of Revenue, discussed the department’s new efforts.
“Internal controls are a living document,” Jasper said. “They need to be constantly reviewed and updated as things change.”
Initiatives include an anonymous reporting system that allows employees to report suspicious activities without fear of reprisal. Additionally, the department has ramped up its internal training programs, and is looking to hire a full-time internal controls officer like the Department of Social Services.
Meanwhile, Althoff said he would look into setting up an anonymous tip line for his department.
The Board of Internal Control reviewed recent state audit findings and updates on various departments’ internal controls.
The 2023 audit highlighted weaknesses in the Department of Social Services. It found inadequate controls over the payment of claims, allowing the same individual to both initiate and approve transactions without a secondary review.
The legislative Government Operations and Audit Committee has said it will meet in October and December to review the alleged criminal activity in both departments.