PIERRE, S.D. — The South Dakota Senate rejected legislation Wednesday that would have expanded the state auditor’s investigative authority, voting 16-17 after debating government oversight and financial accountability.
Senate Bill 60, introduced to strengthen fiscal oversight following recent fraud cases, failed as senators disagreed on the scope of investigative powers it would grant the state auditor’s office.
“South Dakota is made up of honest, hard-working people, and those values are certainly represented by the vast majority of our state employees,” said Sen. Sue Peterson, R-Sioux Falls. “But recently, a few bad actors have drawn attention to the need for additional oversight of state funds.”
The bill aimed to grant the state auditor broader access to agency records and enhance cooperation with the Bureau of Finance and Management. An amendment to limit the auditor’s investigative authority was narrowly defeated before the final vote.
Sen. Taffy Howard, R-Rapid City, opposed the amendment, arguing it would weaken the bill’s effectiveness.
“We are striking out the only two things in here that give this bill any teeth,” Howard said.
Sen. Jim Mehlhaff, R-Pierre, initially supporting the bill in committee, ultimately urged its defeat.
“The Attorney General met with the other two agencies, came up with an agreement, told me to pass it the way it was,” Melhaff stated. “I just don’t think that the way that this has been dealt with has been fair.”
Peterson filed a notice of intent to reconsider the legislation.
However, the Senate did pass a companion bill 32-1 to increase state oversight over finances.
Senate Bill 61 requires each state agency to designate an internal control officer to monitor financial transactions and conduct annual reviews of procedures.
Sen. Tim Reed, R-Brookings, who serves on the Government Operations and Audit Committee, supported the change.
“The Internal Control Board didn’t have enough focus on who should be on there and who’s actually checking to make sure that these control points are truly being checked,” Reed said.
It also reorganizes the Board of Internal Controls within the Bureau of Finance and Management.
The Attorney General’s Office developed the bills in light of recent cases of fraud committed by state employees.
SB 61 now heads to the House for further action.
