South Dakota Administrative RulesTitle 6 - State Treasurer
South Dakota Administrative Rules Title 6 — State Treasurer
I. Overview
Title 6 governs the Office of the State Treasurer of South Dakota, the chief custodian of the state’s funds. The State Treasurer is responsible for the safekeeping, management, and disbursement of public monies as well as related financial administration functions.
This Title outlines the administrative rules concerning the Treasurer’s duties, financial transactions, reporting, and oversight of state funds.
II. Key Responsibilities and Functions
The State Treasurer’s Office under Title 6 administers several critical functions including:
Receipt and Custody of Funds
Receiving state revenues, taxes, fees, and other monies.
Safeguarding funds in appropriate accounts.
Disbursement and Payment
Authorizing payments as directed by the state government.
Managing warrants and checks to state vendors and employees.
Investment of Funds
Investing idle state funds prudently to earn interest or returns while safeguarding capital.
Accounting and Reporting
Maintaining accurate records of all financial transactions.
Providing periodic financial reports to the Governor, Legislature, and public.
Cash Management
Managing cash flow to ensure sufficient funds are available for government operations.
Compliance and Internal Controls
Implementing controls to prevent misuse, fraud, or errors in handling public funds.
III. Administrative Principles and Legal Framework
Fiduciary Duty:
The State Treasurer has a fiduciary obligation to manage public funds responsibly and ethically.
Transparency and Accountability:
The Treasurer must maintain transparent records and report financial activities openly.
Prudence in Investment:
Investments must balance safety, liquidity, and yield in protecting public monies.
Segregation of Duties:
Internal controls ensure separation of functions to minimize risks of error or fraud.
Timeliness:
Funds must be disbursed and reported promptly to meet the government’s operational needs.
IV. Conceptual Case Law Examples
🔹 Case 1: Misappropriation of Funds
Facts:
An employee in the Treasurer’s office diverted state funds for personal use.
Issue:
Was the Treasurer liable for failure to prevent this?
Holding:
The court found that while the Treasurer had implemented reasonable controls, negligence in oversight could result in liability if controls were insufficient.
Principle:
The Treasurer must maintain adequate internal controls but is not automatically liable for all employee misconduct.
🔹 Case 2: Improper Investment of State Funds
Facts:
The Treasurer invested funds in a high-risk venture without adequate safeguards, resulting in loss.
Issue:
Was this breach of fiduciary duty?
Holding:
Yes. The court held that the Treasurer breached fiduciary duty by failing to exercise prudence and due diligence.
Principle:
The Treasurer must invest public funds prudently to avoid unnecessary risk of loss.
🔹 Case 3: Delay in Disbursement Affecting State Operations
Facts:
A delay in issuing payments by the Treasurer’s office disrupted state services.
Issue:
Was the Treasurer’s office responsible?
Holding:
Yes. The court emphasized the duty of timely disbursement to ensure effective government functioning.
Principle:
Timeliness in processing payments is part of the Treasurer’s responsibilities.
🔹 Case 4: Transparency and Reporting
Facts:
The Treasurer failed to publish required financial reports.
Issue:
Did this violate administrative duties?
Holding:
Yes. Transparency and reporting are essential; failure to comply undermines public trust.
Principle:
The Treasurer must provide regular and accurate reports to ensure accountability.
V. Summary Table
| Area | Description |
|---|---|
| Custody of Funds | Receipt, safeguarding, and accounting of monies |
| Disbursement | Authorizing and making payments timely |
| Investment Management | Prudently investing idle funds |
| Financial Reporting | Providing accurate and timely reports |
| Internal Controls | Procedures to prevent errors and fraud |
| Fiduciary Responsibility | Ethical and responsible management of public funds |
VI. Conclusion
The South Dakota State Treasurer’s Office, governed by Title 6, holds a critical role in managing the state’s financial resources with integrity, prudence, and transparency. Its responsibilities require strict adherence to fiduciary duties, effective internal controls, timely disbursement, and clear reporting. Courts support the Treasurer’s decisions where prudent judgment and proper procedures are demonstrated but may hold the office accountable for negligence or misconduct.
RELATED Blog
0 comments