The $3.5 billion accounting error that led to a South Carolina public official’s resignation last spring continues to reverberate through the Statehouse.
Comptroller General Richard Eckstrom resigned last year after the bookkeeping snafu.
But now there’s renewed focus on the error, with more questions raised around almost $2 billionthat sat in a state bank account and that no one appears to be able to identify who or what that money belongs to.
And, like last year, no one says the money was missing or misspent.
Yet state lawmakers are looking into how that money was managed by those over the bank account, mainly the state Treasurer’s Office and its leader, Treasurer Curtis Loftis.
Berkeley County Sen. Larry Grooms’ Senate Finance subcommittee is looking into it.
"(The) $1.8 billion in cash is in an account that's unaccounted for. When I say unaccounted for, I mean the treasurer has been unable to tell us so far which agency and which account the $1.8 billion belongs to," Grooms told Senate colleagues last week. "At the end of June 30 last year, the state of South Carolina had $11 billion in cash assets in investments. Out of this $11 billion, we know where all but $1.8 billion is supposed to go."
Last week, Grooms introduced a resolution that calls on the treasurer to freeze the $1.8 billion account until lawmakers can sort the matter out.
Loftis is expected to be called to testify before Grooms’ panel this month.
In a recent Fox Carolina TV interview, Loftis blamed the Comptroller General's Office for the problem.
"We have very little communication with the Comptroller General's Office. We send them requests for information, they don't give it to us. They send us directives," Loftis told the Fox Carolina reporter. "My office is in turmoil, because I can't get the Comptroller General's Office to follow the law. And the problem the taxpayer has to worry about is, if they don't rein in the Comptroller General's Office, if they don't require him to do his job, then the whole finance system falls apart."
In response to a series of questions sent on behalf of the Post and Courier and SC Public Radio, the Comptroller General's Office dismissed many of Loftis' allegations made on Fox Carolina.
In part, the comptroller's office said it had met with the treasurer's office on multiple occasions about the $1.8 billion since October 2022 through August 2023. And, under the oversight of the Legislature, the comptroller's office also said the agency is given "full power and authority" to issue accounting policy directives.
Grooms says the comptroller’s office discovered the $1.8 billion discrepancy during an inspection of the recent state annual comprehensive financial report, known as ACFR.
Gov. Henry McMaster appointed Brian Gaines, then the highly-regarded state budget director, to be comptroller after Eckstrom’s resignation last year.
Speaking to Fox Carolina, Loftis called for the comptroller’s office to be abolished and its duties shifted to another office, possibly his.
Neither the treasurer nor the comptroller report to the governor, who told reporters last week there should not be one penny of taxpayer money unaccounted for.
"It's not a good situation where money is not accounted for in the government. This is the people's money," McMaster told reporters last Thursday. "Every dime of it we ought to know where it is, where it's going, why it's going there. We want to know when it gets there, if it's used for what it's supposed to be used for. To have this kind of accounting, they call it an accounting error, ... is not acceptable. I mean, when the people lose confidence in ... the government accounts, that's not good."
Both the treasurer and comptroller general are elected officials, and tension between the two offices is nothing new.
The two top financial offices have found themselves at odds at times going back decades.
Not only are lawmakers trying to get to the bottom of the accounting error, they are considering asking the state’s voters to approve making their positions appointed by the governor as opposed to being popularly elected.
