Gant defends himself after audit: 'I'm telling the truth'

The South Dakota Secretary of State's Office under former Secretary Jason Gant misused federal grant money, overspent its annual budget and couldn't account for $43,000 in state funds, according to a report by a state auditor.

Gant disputed some of the report, accepted responsibility for some of its findings and characterized some other findings as accounting or coding errors.

"I'm telling the truth," Gant told Argus Leader reporters Thursday.

Many of the mistakes, he added, could’ve been fixed if he knew about them before leaving office late last year.

“I think it’s wonderful information. I wish I’d had this before I’d left office so those accounting errors could be fixed,” Gant said.

The findings come as part of a report set to be discussed by a state operations committee Friday. Gant, a former state senator, said he received permission to testify before the committee.

Secretary of State Shantel Krebs said she requested the report about a month after taking office in January when her staff was unable to find the original state flag, which had been on display in the office.

Gant said he'd been alerted of the report in November of 2014 and was surprised that Krebs requested it because he "didn't know this type of report existed."

Attorney General Marty Jackley announced Wednesday that the flag had been recovered from a former employee of the office who worked under Gant, Krebs' predecessor. The disappearance of the flag and the review that it sparked turned up other problems in the office, including the removal of documents from a state website.

Original state flag recovered; charges likely

"This is a perfect example of the last nine months of what I've gone through and why we need more oversight in state government," Krebs said Thursday.

The auditor's report found that the office under Gant came up short by more than $43,000 in its accounting between July 1, 2013, and Dec. 31, 2014.

"There was no evidence of a reconciliation explaining the $43,307.84 difference," Auditor General Martin Guindon wrote in the report.

Tim Flannery, the state's audit manager, said he doesn't think there was money missing from the office, although it's possible. Instead, the office used two separate accounting systems, and he thinks the office was lax at not reconciling the two systems each month.

"If you have two systems you should always have a reconciliation," Flannery said.

Gant agreed that it was a reconciliation issue between two accounts and said he wished it would have been brought to his attention before leaving office.

"I wasn't able to dig into the issue," he said.

The report also reviewed a sample of spending under two federal election-related grant programs between fiscal years 2011 and 2015. Guindon found the office did not appropriately document spending and had no invoices for reimbursements under the Help America Vote Act (HAVA) and the Federal Voting Assistance Program (FVAP).

He wrote that the office "did not have adequate internal control policies or procedures" for managing the programs.

HAVA subgrants to counties totaling $110,495 were not invoiced but appeared to match county requests. The office under Gant also stored HAVA data and others business records in the same Web-based storage service, which was not authorized under the HAVA grant.

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An additional $12,000 charged to the HAVA grant was for "unallowable" purposes, the report concludes.

"Without having documented policies, there is an increased risk of lack of consistency, awareness and support for decisions that were made, which could result in noncompliance with grant regulations," Guindon wrote.

Gant insisted that his office wouldn't have reimbursed counties without the proper invoices and he speculated that the invoices had been misplaced after he left office. He also said that the $12,000 was a coding error.

The report also confirmed that documents were removed from the Secretary of State's website in 2014 that contained unredacted personally identifiable information. Those have yet to be returned to the website and will require more money to be added in a redacted format.

Gant said he decided to remove corporate forms from before 2011 because a minute number might have contained social security numbers or other personal information.

Three of 30 iPad minis also were reported lost before Jan. 2, 2015.

Gant said that the 30 iPads were among about 100 devices his office purchased when it was testing and revamping an overseas military balloting system. The devices were used across the state to test the system. He acknowledged he didn't have a proper check-in, check-out system to track them.

Follow Jonathan Ellis on Twitter @argusjellis and Dana Ferguson @bydanaferguson

What the report found:

- More than $43,000 in funds unaccounted for between July 1, 2013, and Dec. 31, 2014

- Money from two federal election-related grants was misspent or incorrectly invoiced

- Three iPad minis were reported lost before Jan. 2, 2015

- An original state flag also went missing, but was recently recovered