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Farm loan program problems cost South Dakota $17,000

SIOUX FALLS (AP) -- An internal audit has found that shoddy record-keeping at the South Dakota Farm Loan Mediation Program has cost the state at least $17,000 since 2009.

The state Agriculture Department, which commissioned the audit, says the problems have been corrected, according to the media. Agriculture Secretary Walt Bones said no money was taken, and Nathan Sanderson, a policy adviser in the governor's office, said none of the people found to have been responsible for the lax record-keeping are with the department anymore. He declined to say if they were fired.

"We've done the best that we can to get this program back on the right track," said Lucas Lentsch, director of agricultural development.

The mediation program was set up in 1988 to keep disputes over farm loans out of the court system. Both farmers and lenders can request mediation, and it is mandatory for debt disputes involving more than $50,000.

Accounting problems uncovered by the audit centered around money that was not collected or misplaced -- ranging from payment checks not being deposited to bills not being sent out. "No funds were missing," Bones said.

Deb Bollinger, the accounting consultant hired in September to go over the department's books, reviewed program records back to 2007. She found that at least 157 payment checks went undeposited, and that in at least 54 cases, the federal Farm Service Agency was not billed for mediation services.

The haphazard accounting "progressively worsened through fiscal years 2010 and 2011," Bollinger said.