S.D. Codified Laws § 61-3-28
There is established a special fund to be known as the employment security contingency fund which shall be maintained by the state treasurer separate and apart from all public moneys or funds of the State of South Dakota. The fund shall consist of all interest, penalties and fines collected under this title together with any interest earned on moneys in this fund. Any provisions of this title to the contrary notwithstanding, all interest, penalty and fine payments collected shall be deposited in the clearing account of the unemployment compensation fund for clearance only and may not become a part of such fund. After clearance thereof, the moneys derived from such payments, less refunds made pursuant to § 61-3-29 and other provisions of this title, shall be deposited in the employment security contingency fund. The moneys may not be expended or available for expenditure in any manner which would permit their substitution for, or a corresponding reduction in, federal funds which would, in the absence of the moneys, be available to finance expenditures for the administration of this title, but nothing in §§ 61-3-28 to 61-3-31, inclusive, prevents the moneys from being used as a revolving fund, to cover expenditures for which federal funds have been requested but have not yet been received, subject to the charging of such expenditures against such funds when received. The moneys in this fund shall be used by the department, with prior approval of the Governor for each withdrawal, for the payment of costs of administration which the Governor finds are not properly and validly chargeable against federal grants (or other funds) received for or in the employment security administration fund. The moneys in this fund are hereby specifically made available to the department, with prior approval by the Governor, for replacement within a reasonable period of time, of any moneys received by this state in the form of grants from the federal government for administrative expenses which because of any action or contingency have been lost or have been expended for purposes other than, or in excess of, those found by the United States secretary of labor to be necessary for the proper and efficient administration of this title. Such moneys shall be available either to satisfy the obligations incurred directly or by transferring the required amount from the employment security contingency fund to the employment security administration fund.
SDCL 61-3-28