Shared from a release from the Office of Gov. Dennis Daugaard
Gov. Daugaard signed into law Senate Bill 162 to strengthen internal controls over federal grants that are passed through the state of South Dakota to a sub-recipient.
Following the termination of Mid Central Co-op’s management contract, Gov. Daugaard earlier this year tasked Lt. Gov. Michels to work with the Department of Legislative Audit and the Bureau of Finance and Management to identify ways to improve and make uniform the oversight of grants passed through the state government to sub-recipients.
“This bill will create better internal controls to manage these entities that are arm’s length to the state. The new safeguards will ensure that federal and state objectives are met, expenditures are documented, and potential conflicts of interest are recognized and avoided,” Gov. Daugaard said.
SB 162 establishes the Board of Internal Control to develop and implement a system of internal control to be utilized throughout state government. The board will ensure sub-recipients are enforcing conflict of interest policies, adhering to internal controls systems, and posting audits and internal revenue findings.
The board will consist of the Commissioner of the Bureau of Finance and Management, the State Auditor, a Board of Regents designee and an appointee of the Chief Justice. Three other state agency employees will be appointed to the board by the Governor. The bill requires each state agency to designate an internal control officer to serve as a liaison between the board and a sub-recipient.
What does this mean? Any entity that receives pass-thru dollars from the State of South Dakota needs to comply with the following requirements:
- Conflict of interest policy is in place and enforced
- 990 has been filed and is displayed immediately after filing on Organization’s website
- Effective internal control system is in place
- Comply with all federal audit regulations
Contact the experts at Ketel Thorstenson with any questions or to understand how this may affect you or your organization.