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State activities association saw unplanned expenses in 2014

PIERRE — The South Dakota High School Activities Association paid nearly three times more than the $7,000 budgeted for audit services this year because of snags in two prior years.

The state Department of Legislative Audit wasn't able to deliver the fiscal 2011 audit until July 23, 2012. State fiscal years run July 1 to June 30. The billing for the 2011 audit came during the association's 2013 fiscal year.

The firm hired by the association to provide financial statements to Legislative Audit for the 2012 fiscal year was delayed in delivering them, according to state Auditor General Martin Guindon.

That led to Legislative Audit billing later than normal for the second year in a row. The fiscal 2012 audit was delivered on Aug. 29, 2013. That was after the start of the association's 2014 fiscal year.

Guindon said the association hired a different firm to provide the statements for the fiscal 2013 audit. He said the new firm's work was "very timely." Legislative Audit completed the fiscal 2013 audit on Feb. 28, 2014.

"Thus, you had two audit bills presented by us for payment in the same fiscal year," Guindon said.

Together the two billings -- $11,524.50 and $11,559.25 -- totaled $20,083.75. Not only was the total much greater than budgeted, but the individual amounts were more than in previous years as well.

"The audit bill for fiscal '11 was $9,022 and for fiscal '10 it was $9,048," Guindon said. "The bills for fiscal '13 and fiscal '12 were higher because of additional new accounting standards that had to be dealt with, not because of any problems we encountered at the (association)."

Wayne Carney, the association's executive director, had been budgeting $10,000 annually but reduced the amount to $7,000 for each of last year and this year.

Carney provided a summary that showed the association was billed only $6,916 in its 2012 fiscal year and $2,106 in the 2013 fiscal year.

The $10,000 budget was changed to $7,000 for the 2013 fiscal year and stayed at $7,000 for the current 2014 fiscal year.

The association also spent much more than budgeted for legal services this year.

Through April 30, the amount billed for legal advice and lobbying was $20,570. The budgeted amount for legal work was $4,500.

Carney said there were unforeseen expenses dealing with the Legislature's decision to make the association subject to South Dakota's open-meeting laws. The association fought against the new law.

He said the association also faced additional costs for legal work on its new policy regarding participation by transgender students in athletic competition.

Carney said Thursday he won't know how much the total expense would be for legal work during the 2014 fiscal year until after it ends June 30.

It will be more.

"The last billing we received is dated June 3, 2014, and would not be included in the financial reports that the board reviewed (Wednesday)," Carney said.