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SCHOENFISH: Setting up for the end of session

Week 7 of the legislative session has been completed.

Last Friday was crossover day, which means all Senate and House bills had to either pass or fail in their respective chambers. Now that crossover day has passed, the House will be taking up mostly Senate bills this week.

HB 1178 is a bill I sponsored using my experience working as an CPA at Schoenfish & Company, Inc. Government entities such as cities, schools, hospital district boards and certain utility districts are required to have audits, depending on certain factors like how much revenue they have received. At the present time, there is not a deadline mandated by the state to have the audit completed and there is no consequence for not getting the audit done. HB 1178 sets a deadline to have an audit submitted within 18 months after the end of the entity's fiscal year. HB 1178 also requires a notice to be published in its local paper if the entity is delinquent, and creates a $10-per-day fine if the audit is late.

The attorney general can waive the penalty in cases for which the delayed is deemed "good cause." In the past, some entities have gone more than five years without hiring an auditor. When the firm I work for has come across these situations, we helped get these entities back on track. That is an example of the extra mile we always go at Schoenfish & Co. to serve the taxpayers and hold government accountable. To prevent these serious situations from occurring again, I felt it was time to set clear guidelines and that's why I brought the bill. HB 1178 passed out of the House Government Operations and Audit Committee, 4-0, and off the House floor, 64-0. Not many bills with such new and significant changes pass with no opposing votes. It was good to see this bill have so much support as it makes its way to the Senate. HB 1178 is a big step in improving accountability for our tax dollars.

I am the House's prime sponsor for SB 126, which revises annual report requirements for municipalities. Currently, all cities must complete annual reports, but cities with populations under 500 do not have to submit them to the Department of Legislative Audit. HB 126 would require those cities under 500 population to submit their reports, just like larger municipalities. It also extends the deadline to submit the report by a couple of months. This gives cities more time to ensure accuracy and flexibility for those that hire an accounting firm to complete the report. SB 126 also passed with no opposition.

I brought HB 1263 to increase the allowable fund balance for schools. As a school auditor, I don't believe caps on reserves are responsible. I suggested a minor change by increasing their limit by 10 percent. Like other bills changing the funding formula that was set a few years ago, it had strong opposition and was defeated. HB 1128 would have put another mandate on how schools spend increases in funding they receive. I spoke against this bill and pointed out that schools are dealing with the new fund balance caps, loss of two-year averaging for declining enrollment, and if we're not making those fixes to help schools out we can't give them another mandate on how they spend their money. The arguments resonated, and the bill was defeated, 32-34.

HB 1311 changes legislative pay to 20 percent of the median income of South Dakota. It is understandable why many would support increasing legislative pay, due to the low pay of $6,000 a year. Not only do legislators sacrifice significant time and income to serve, but a few politicians have been unprofessional enough to attack private businesses that legislators work for, go after their personal lives, and even harass family members of legislators. Some politicians engage in this conduct to discourage good people from running for public office. That being said, a raise in legislative pay isn't as high of a priority for me as education, community support providers, nursing homes and state employees. I voted against the legislative pay increase, but it passed, 50-16.

If anyone has questions, contact me through my email at, or by phone at 605-660-6468.