After $3.5B error, SC budget writers want to see how comptroller compiles annual report
Following the disclosure that the state’s cash balances were mistakenly inflated by $3.5 billion, House budget writers want the comptroller general’s office to show how it compiles information for the office’s annual financial report.
Under a pair of proposed one-year laws adopted by the House Ways and Means Committee as it goes through its budget discussions this week, the comptroller general would have to report how it compiles state agency account balances in audited financial statements.
Earlier this month, Comptroller General Richard Eckstrom, who is the state’s chief accountant, disclosed that over a 10-year period, his office double counted money allocated to colleges and universities after it was transferred out of the state’s general fund.
The mistake compounded over time and led the comptroller general to overstate the state’s cash balances by $3.5 billion. Since the error and the source was discovered, the state’s annual comprehensive financial report produced by the comptroller general’s office has been corrected.
“What this amendment would do is to require a documentation of that process so that we don’t have this problem again in the future,” said state Rep. Micah Caskey, R-Lexington.
The comptroller general’s office did not immediately comment on the proposed provisos.
Eckstrom, who has been in office since 2003 and was unopposed in last year’s election for another four-year term, has been under fire from lawmakers since the error’s disclosure.
To help the comptroller general’s office in reporting cash balances in the future, the House Ways and Means Committee Wednesday proposed spending $40 million to upgrade the state accounting system to close “the information and knowledge gap” between agencies for compiling accounting reports.
State Rep. Gilda Cobb-Hunter, D-Orangeburg, lamented how Eckstrom was critical of South Carolina State University when it went through financial problems.
“I just think it’s karma that this error he’s made has been in the higher education arena. I just want to note that for the record. He was pretty nasty with SC State back then,” Cobb-Hunter said. “It goes back 10 years ago, so when he was crapping on them, he was making a mistake himself.”
The $3.5 billion reporting error of cash balances however won’t have an affect on this year’s budget discussions.
Money used to determine a state’s spending plan for an upcoming fiscal year is based on projected revenues as opposed to cash balances appropriated in previous years.
The reporting error was in one annual financial report the comptroller general, whose pay was increased by 64% to $151,000 a year for this term, is responsible for preparing.
“The comptroller general prepares something for outside agencies in other states to see how we’re doing as a state that is apparently unrelated to any cash balances in those accounts,” said House Ways and Means Chairman Bruce Bannister, R-Greenville. “His mistake in the (annual comprehensive financial report) will not affect any of our state budget or our projections.”
This story was originally published February 22, 2023 at 1:16 PM.
