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Whistleblowers Help Stop Errors at Corn Palace; Lesson for GOED?

The Department of Legislative Audit turns from the crony-capitalist pork palace to the Mitchell Corn Palace. Auditor General Marty Guindon finds that Corn Palace management has failed to follow proper procedures and/or city rules in counting, securing, and documenting money from its concessions operations. Guindon's report finds sloppy contracting with performers, vendors, and sponsors. The report also alerts Mitchell officials to violations of municipal credit card and gift policies.

The Department of Legislative Audit presented its report to the Mitchell City Council last night. Mitchell Mayor Ken Tracy asked for Corn Palace director Mark Schilling's resignation at the beginning of the month. With the audit now public, Mayor Tracy says there's no evidence that Schilling broke the law or took money from the city.

Mayor Tracy notes that the investigation happened only because people spoke up:

The city asked the state for the audit after Tracy was informed by multiple sources — including Mickelson, the assistant director of the Corn Palace — who he said told him there were certain procedures at the Corn Palace that needed review.

“I appreciate the fact that those people had the guts to come to me and tell me what was going on,” he said.

Mickelson has since taken over for Schilling on an interim basis [Chris Mueller, "Mayor Uncertain If Schilling Stole Money, Committed Any Crimes," Mitchell Daily Republic, 2014.03.18].

Schilling took one questionable trip to Las Vegas in November 2012. Solo counting of the till and other sloppy bookkeeping may have been going on for longer than that. It thus took over a year for the information to come out. But it came out, because other employees saw what was happening and felt they should and could voice their concerns to someone up the chain of command.

The DLA's report on the Corn Palace parallels its audit report on the Governor's Office of Economic Development in one important way. Each report identifies as a fundamental problem the lack of oversight leaving lone actors too much leeway to err or malfease. But where Mitchell employees apparently felt comfortable raising their concerns, the Eide Bailly review of GOED internal controls found that GOED employees were not sufficiently aware of the channels through which they could report suspicious activity without fear of retribution.

Preventing mistakes and abuses in any organization, public or private, requires putting more sets of eyeballs on every operation. Catching errors and abuses requires that honest eyeballs turn to voices when necessary. Mitchell can be glad its Corn Palace voices spoke up. South Dakotans should continue to wonder why more voices in Pierre haven't spoken up about mistakes and malfeasance in the Governor's Office of Economic Development.


  1. Rod Hall 2014.03.18

    Before Mitchell "blows" $7+ million of taxpayer dollars on colored lights, stupid windows and other questionable things on the Corn Palace, perhaps state of the art cash registers and accounting procedures could be put into place.

    If Mayor Ken Tracy would have had his eyes and ears open, he could have used executive sessions to learn the extent of problems and make legitimate corrections.

    Instead it seems, that Mark Schilling is being "Bendasized" to cover up the long established "good old boys" procedures, which have existed far too long.

    The headline in The Daily Republic seem to assume Schilling is guilty instead of assuming a person is innocent until "proven" guilty.

    It is time to circulate recall petitions for Mayor Ken Tracy!

  2. Tara Volesky 2014.03.18

    Now if they would just leave the murals and domes on the corn palace alone. I am more concerned about the millions of taxpayers dollars being spent on the corn palace and city hall. To bad the paper didn't report on that. I questioned the council and Mayor for not having public debates. I also suggested to them, if they think this is such a grand plan, then let the people vote on it. The paper is suppose to be the watch dog for the people. The editorial board should support a public debate and vote. $7.2 million dollars is a lot of money. Let the people be heard!

  3. Tara Volesky 2014.03.18

    Rod is right, got to find a scapegoat. Accountability policies should have been put into place years ago. But instead of saving taxpayers dollars, they are like kids in a candy store listening to special interests instead of we the people. The next thing will be the new city hall which will be another inside job with no outside bids and nothing posted on the internet. Don't do what our crony politicians in Pierre are doing. Good old boy crony capitalism!

  4. guido 2014.03.19

    The good-ol' boy network is alive and well in Mitchell still. It was there 25 years ago when I went to college, I just didn't know the players at the time. Seven million dollars would make a nice down payment on a new venue somewhere else in Mitchell, but instead let's rejuvenate the world's largest bird feeder. And can someone tell me why I have to weave in and out of tacky tourist merchandise while I am at a high school or DWU event at the Palace? Put that stuff away during the winter, and bring it out for the suckers during the summer...

  5. Deb Geelsdottir 2014.03.19

    Guido said "world's largest bird feeder."

  6. Tara Volesky 2014.03.19

    Deb, the tourists love The Worlds Only Corn Palace. It is a great venue for Mitchell and the birds like it too. lol

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