South Dakota Corn Financial Investigation Reveals Mismanaged Company
A financial audit investigation of the state’s largest agricultural group has found evidence of business mismanagement practices by its former chief executive and legislative director.
Bob Rauenhorst, a certified fraud examiner at ELO Prof, an accounting service in Mitchell, addressed the South Dakota Corn Utilization Council at their meeting Thursday, saying the group’s longtime executive director Lisa Richardson and the legislative director, Teddi Mueller, had not acted in the best interest. advice.
Mueller was found to have authorized the disbursement of SD Corn Utilization funds when she was neither an employee of the organization nor a registered agent of the council, Rauenhorst said. She also hired her husband’s advertising company for certain activities through the council, going against South Dakota state law regarding perquisites.
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“For Teddi Mueller to authorize these expenses is a violation of state law, because her husband being the principal officer and CEO, she would have had a collateral benefit,” Rauenhorst said.
How did we come here?
In August, an investigation by Argus Leader found that South Dakota Corn had been warned that it lacked basic financial management controls for more than a decade.
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Between 2010 and 2020, financial reports from accounting firm Eide Bailly revealed years of material weaknesses.
South Dakota Corn hired Brett Koenecke, an attorney for Pierre, to find an auditor to review the group’s financial records in August. Richardson and Mueller were suspended July 15 and subsequently resigned.
Thursday’s meeting was the culmination of a months-long investigation into fiscal years 2019, 2020 and 2021.
From funding a husband’s ad company to unclear job descriptions
During Rauenhorst’s testimony, he described that Mueller hired her husband Jay’s advertising company for the three years under investigation. Bills from the advertising company ranged from $135,750 to $47,730 and $80,750.
Under state law, this is illegal because Mueller would have indirectly benefited and state employees are not allowed to have a business contract with their spouse, Rauenhorst said.
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“…That by authorizing the expenses of her husband’s company, she benefited from it,” he said.
It was also found that in several invoices, there were purchases of iPads, headphones, wireless headphones and other electronic devices along with four free months of Apple Music and Apple News. The incentives were redeemed from Muller’s husband’s email address, Rauenhorst said.
While Mueller was involved in authorizing payments for distribution, Richardson was involved in creating the monthly financial statement report. Richardson would give the report to their accountant explaining that she should “simplify” it.
Richardson, who served as SD Corn’s chief executive for years, also lacked a clearly defined job description, Rauenhorst said.
At the end, Rauenhorst made several recommendations that the board said they have already implemented, such as creating clear guidelines for the position of executive director.
SD Corn satisfied with the results
After the meeting, South Dakota Corn Utilization Council Vice President Chad Blindauer said he was pleased with the results of the survey.
“Moving forward, we just have a full complement and get back to business with research projects and are responsible for those levy dollars,” he said.
Blindauer said the council was unable to press charges and instead it was up to the state to do so.
The audit report will be made public on the state legislature website.