To serve the legislators and taxpayers of the State of South Dakota by providing quality independent audits and assistance to enhance public accountability, improve reporting capability and strengthen operational controls of state and local government.
HISTORY AND BACKGROUND INFORMATION
The department was created in July of 1943 and was known as the Department of Audits and Accounts. The head of the newly created office was the Comptroller. In 1966 the title of the head of the department was changed from Comptroller to Auditor General of South Dakota. The department name was changed in 1974 to Department of Legislative Audit.
There have been six Auditor Generals. John Penne was the first and served from 1943 until 1970. Eldon Stoehr served from 1970 until 1977, Gordon Milbrandt served from 1977 until 1983, Maurice Christiansen served from 1983 until 2000, Martin Guindon served from 2000 until 2020 and Russell Olson is the current Auditor General. The Auditor General is appointed for an eight year term by a joint resolution of the Legislature and there is no limitation on the number of terms he or she can serve. The Auditor General can be removed without cause by a joint resolution of the legislature any time it is in session.
The department was initially given the responsibility of examining records of state agencies, counties, municipalities and school districts. These audit responsibilities still exist for state agencies, counties and municipalities. School districts were given the option of hiring an independent public accountant or the Department of Legislative Audit in 1995.
The Department of Legislative Audit approves the independent public accountants who perform government audits. After the audits are complete, they must be approved before the auditee can make final payment.
The department initially performed examinations and reports were issued as such. Since the Early 1970's, certified audits have been performed in accordance with generally accepted government auditing standards. Most of the audits performed are fiscal and compliance audits. Expanded scope or performance type audits are performed at the request of the Legislature.
The Comptroller or Auditor General has been an ex-officio member of the Board of Accountancy since 1944. As far as we know South Dakota is the only state to have the head of the audit department represented on the state accountancy regulatory board.
Experience working for the department qualifies as experience toward the certified Public Accountant license. Professional staff are strongly encouraged, but not required, to become certified.
LEGISLATIVE OVERSIGHT AND INTERACTION
The Executive Board of the Legislative Research Council provides oversight for the department when the legislature is not in session. It is a fifteen member board consisting of nine legislators from the majority party and four legislators from the minority party plus the President Pro Tempore of the Senate and the Speaker of the House. The thirteen legislators are chosen by their respective parties and can serve only three consecutive terms.
The Government Operations and Audit Committee reviews audit comments and recommendations for state agencies during the interim when the legislature is not in session. The committee is a standing committee of the legislature. The committee is composed of five members of the Senate and five members from the House of Representatives. The majority party has three members from the House of Representatives and four members from the Senate. The minority party has two members from the House of Representatives and one member from the Senate. The Department of Legislative Audit staffs the committee.
PROFESSIONAL ORGANIZATION MEMBERSHIPS AND PARTICIPATION
National Association of State Auditors, Comptrollers and Treasurers (NASACT) - The department is a member of NASACT. The organization is comprised of officials representing the three areas of expertise from the various states. The purpose of the organization is to be the eyes, ears and voice for the officials as a whole in dealing with the federal government, professional organizations and standards setting groups.
National State Auditors Association (NSAA) - The department is a member of the NSAA. This organization is comprised of state auditors from the various states. It is a sub-group of the NASACT and deals with issues that are specific to the state audit function. It brings the members together for training and interaction to address common problems and concerns.
Member of the American Institute of Certified Public Accountants (AICPA) Government Audit Quality Center (GAQC)- The AICPA is the national organization that provides guidance and standards for its members to follow when performing audits or accounting functions and serves as an advocate for the CPA profession nationally. The GAQC promotes the importance of quality governmental audits and the value of such audits to purchasers of governmental audit services. GAQC is a voluntary membership center for CPA firms and state audit organizations that perform governmental audits.
South Dakota CPA Society (SDCPAS) - The department pays for membership in the SDCPAS for those staff members who interact with society members in the performance of government audits in South Dakota. The SDCPAS is a state organization that provides training for its members, represents members in issues before the legislature and is an advocate for the CPA profession in South Dakota.
DLA performs financial and compliance audits of state agencies and local governments including the following types of entities:
- State entities:
- State Agencies
- Local governments:
- School Districts
DLA performs expanded scope audits of state agencies as directed by the Executive Board. DLA also provides audit services pursuant to special requests and in cases of fraud.
Local Government Accounting Systems
DLA develops and maintains the accounting systems and associated accounting manuals for counties, municipalities and school districts.
- State Entities
- DLA provides assistance to state agencies concerning internal control systems, accounting policy, computer systems implementation, federal compliance issues and many other matters.
- Local Governments
- DLA provides assistance to implement accounting systems for local governments by holding periodic workshops on basic accounting and completion of required annual report forms.
- DLA publishes a Bid Booklet that details the legal requirements for procurement of goods and services by local governments. This booklet is continuously updated and widely distributed to local and state government officials as well as the vendor community.
- A database of annual financial report information for counties and municipalities is maintained by DLA to facilitate decision making by various parties. Local and state government officials, local governing board members, legislators, citizens, and academicians have requested information from this database.
- DLA also provides assistance on other matters of concern to local governments by telephone or onsite depending on the situation.
- DLA provides assistance to the Legislature during session and throughout the year by answering requests for information. Additionally, DLA monitors bills during the legislative session and provides testimony or commentary when it is appropriate or requested by the Legislature.
Independent Public Account (IPA) Audit Approval Process and Technical Support
DLA approves all audits of state and local governments and certain non-profit organizations conducted by IPAs. This approval process includes desk reviews of audit reports issued by the IPAs as well as reviews of IPA working papers on a sample basis.
DLA conducts an annual conference to provide training and information to the IPAs with the objective of improving the quality and consistency of government audits performed in the state. Additionally, to assist them with their audits, DLA provides audit programs and data to the IPAs including state payments to local governments and federal surplus property received by local governments.
In addition to the annual training conference, technical support is provided to IPAs through a newsletter that is published and distributed about three times a year, and daily via the telephone. Topics usually addressed are legal compliance issues, accounting and financial reporting requirements, and the application of generally accepted government auditing standards.