SOUTH CAROLINA (QUEEN CITY NEWS) — On Wednesday, lawmakers interrogated officials who work closely with the state’s money hoping to figure out where the issue started and why there was a communication breakdown.
State auditor’s office representatives say audits from an independent firm never showed a problem until fiscal year 2022.
“That’s the first year that any of us knew that there was a major problem,” said Sue Moss from South Carolina’s office of the state auditor. “And that was because of the work of the comptroller general’s office that that became acknowledged to us.”
Moss says it was not the auditor’s office’s sole responsibility to notify lawmakers. Instead they just audited what they got from the state treasurer and comptroller general.
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“We took the action that needed to be taken with a restatement and a finding,” she said.
“Both officers must accept our shared responsibility in properly managing and reporting to states cash and investments,” said Comptroller General Brian Gaines.
But State Representative Chris Murphy from the 98th District in Dorchester County pushed further.
“The thing that I can’t get over is if there is shared or equal responsibility, then there can also be a denial of anybody being responsible,” Murphy said. “And there has to be some accountability to the taxpayers of this state.”
Murphy asked CG Gaines whether an investment was made in 2018 involving account number 993 — but neither the state auditor nor comptroller general made the investment.
“Who else had control of that account?” Murphy asked.
“Fund 3030 50993 is under the exclusive authority of the state treasurer’s office,” Gaines said.
Chesterfield County Rep. Richie Yow sits on the Ways and Means Committee. He wishes the issue was brought to the General Assembly’s attention sooner.
“This mystery money, if you will, or lack thereof, can affect the state’s bond rating, which means the state can’t take it,” Yow said. “It can’t take advantage of the other funding options.”
State Treasurer Curtis Loftis faced questions about the money after making his office’s budget presentation. Murphy held Loftis to the fire about his past comments that $1.6 billion of the supposed $1.8 billion was actual money. But Loftis explained account 993 doesn’t hold cash because it never existed.
“So how does an account that does not exist, that does not have money, earn interest?” Murphy asked Loftis. “And if it’s an account that does not exist, as you stated, just a holding account, why are we depositing money into that account?”
“The AlixPartners audit determined that the $1.6 billion is not real cash and I have no reason to question their determination at this time,” Loftis responded. “They also determined that when you reverse the entry and take the $1.6 billion away, it does not affect the total cash value.”
Murphy continued to ask the question in different ways.
“The AlixPartners report says it does not exist in fund 0993. They have not told us where it does,” Loftis said. “These are self-balancing accounts with they haven’t told us. We’ve asked for a review with AlixPartners. We have not been able to get that yet. They review with everybody. We are waiting.”
Yow says he can’t say how many more hearings will be needed to conclude the lawmakers’ investigation. But he says there’s still work to be done in the general assembly regarding the audit findings.
“In that will we’ll be identifying it and talking about it some more and what provisos and appropriations are needed to ensure the recommendations are applied and its better for all South Carolina residents,” Yow said.
