Report on existence of SC’s mysterious $1.8B account delayed. Here’s when it’s expected
An outside audit on the existence of $1.8 billion sitting in a state flow through account has been delayed.
S.C. Department of Administration Executive Director Marcia Adams wrote to Gov. Henry McMaster that the report from outside auditors due Dec. 31 would not be sent to the governor’s office and top lawmakers until Jan. 15.
Lawmakers set aside $3 million for the outside forensic auditor to come in and determine whether the $1.8 billion actually exists, where the money is supposed to go and how it went unreported for years.
The money was in a flow-through account created when the state switched accounting systems.
The review includes examining accounting entries for multiple state funds and accounts over the course of nearly a decade, Adams wrote in a letter to McMaster sent Dec. 13.
AlixPartners, a Washington, D.C.-based consulting firm, was hired in July to conduct the review.
“While ... AlixPartners has made substantial and tangible progress towards developing findings, conclusions and recommendations relevant to its review, there are additional meetings, interviews, document reviews, etc. needed to finalize and verify those findings, conclusions and recommendations,” Adams wrote in a letter to McMaster.
Lawmakers were alerted to the existence of the $1.8 billion account by Comptroller General Brian Gaines, who was appointed last year to replace previous Comptroller-General Richard Eckstrom, who resigned in 2023.
Eckstrom acknowledged he inflated the state’s cash balances in annual financial reports by $3.5 billion over the course of 10 years by double counting money allocated to colleges and universities. The double counting is believed to be as high as $5.9 billion, but Treasurer Curtis Loftis said Eckstrom used the $1.8 billion account to help reduce the size of the accounting error.
As existence of the $1.8 billion account came to light, tension grew between the treasurer’s office and comptroller general’s office over the existence of the account.
During last year’s session, a state Senate Finance panel placed blame for the $1.8 billion accounting issue on Loftis.
The governor’s office eventually had members of the treasurer’s office, comptroller general’s office and the state auditor’s office and Department of Administration work together to look into the $1.8 billion and prepare for the forensic audit. Staff from the governor’s office and the attorney general’s office also worked with the group.
The new report date is the second day of the 2025 legislative session and when the Comptroller General’s Office is tentatively scheduled to make its budget presentation to a House Ways and Means panel.
The Treasurer’s office is tentatively scheduled to make its presentation the following week.
