Richland County audited the penny program. Then agreed not to disclose the results
Richland County Council paid an accounting firm to review its $1 billion, penny tax-funded roads program, then signed an agreement not to disclose the results.
The non-disclosure agreement, or NDA, is mentioned in a letter Councilman Joe Walker sent to the accounting firm of Cherry Bekaert asking the firm to release the full information to the public.
Walker said in the letter he was asked to sign the legally-binding agreement not to publicly disclose the private contents of the audit by county attorney Larry Smith before Walker could review it.
“I question the validity of forcing an elected public official to maintain confidentiality as it pertains to the results of a publicly funded audit on a public tax program,” Walker writes. His letter indicates the audit has been ongoing for more than 18 months.
Accountants with Cherry Bekaert presented the audit results to the council in May. Cherry Bekaert said it was unable to reach a conclusion on how the private consortium that manages the penny program operated because of an ongoing legal dispute between Richland County and the consortium, the Program Development Team, over payments.
In March, two months before some of the audit results were presented publicly to the county council, the council members voted to transfer management of the roads program from the PDT to the county. The change is effective in November.
The audit did identify “significant deficiencies” in how the joint venture’s internal financing , according to a portion of the report that’s publicly available.
Walker declined to characterize to The State what other information found by the accounting firm might be covered by the NDA but not made available to the public, citing the NDA.
Walker indicates in his letter he knows of Richland County residents ready to pursue legal action to get the full audit results. He said the public has the right to know what’s in the report.
“Those paying for it deserve to know its findings,” Walker said in the letter. “Although I obviously cannot speak to the results themselves, I am keenly aware of the publics perspective that no one keeps good news a secret for this long.”
Earlier this week, Walker wrote to S.C. Attorney General Alan Wilson requesting an investigation of Richland County, citing allegations of misconduct and irregularities made by former Richland County Administrator Gerald Seals in a letter disputing his firing last year.
“I believe this audit and the associated request for secrecy fall squarely into those questionable activities,” Walker wrote in his latest letter, which was copied to Wilson and U.S. Attorney for South Carolina Sherri Lydon.
Other council members said they also had to sign NDAs in order to receive the full information from the auditing firm. Councilwoman Allison Terracio said she believed the requirement was a standard practice of the accounting firm.
“I did find it odd,” Terracio said, describing the private presentation by the auditors as “fairly more detailed.” She said she supports making the full audit public.
“If everybody knows what improvements need to be, that will build trust in what the penny does,” Terracio said.
The auditing firm could not be reached for comment.
Councilwoman Chakisse Newton supported the move. “We’ve been going back and forth with the audit firm to get more information since they presented to Council, but we haven’t gotten it,” she said.
Councilwoman Dalhi Myers, who also signed an NDA, said releasing the report would “force accountability in areas where there has been intentional misdirection.”
Council chairman Paul Livingston said he did not recall signing an NDA to review information from the auditing firm, although he said the firm likely has some proprietary information it would want to keep confidential.
“I don’t know that, every firm the county deals with, should we have access to their records?” Livingston said.
He said he would propose the council ask for more information to be released by Cherry Bekaert at the council’s next meeting on Thursday.
State Rep. Kirkman Finlay, R-Richland, said asking elected officials to sign an NDA to see an audit of a public program is “absurd.” He said a failure to release the full audit results to bondholders on penny projects could affect the county’s credit rating.
“It must be Chernobyl-level toxic in financial terms,” Finlay said, while praising Walker’s decision to push for a public release of the document. He referenced Walker’s U.S. Army experience, which included service in Iraq.
“I told him when he ran for Richland County Council, it would make his time in Fallujah look like a vacation, and it’s about to,” Finlay said.
This story was originally published July 31, 2019 at 10:50 AM.
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