Bafflement and conflict reverberate through the corridors of power in South Carolina, as an elusive $1.8 billion shimmers like a modern-day mystery. A bank account, swollen with this trove of cash accumulated over a decade, has ignited a hot pursuit by both state and private accountants to learn whence this money originated and to whom it was destined.
Imagine, if you will, sauntering into your local bank, only to have the bank president confide, “We have a bounty in our vault, but its provenance is unknown.” Smilingly states Republican Sen. Larry Grooms as he spearheads a Senate investigation on this baffling issue.
However, this is no standalone debacle. The saga of South Carolina’s accounting woes continues, with the two government agencies in charge of maintaining balanced books — typically helmed by elected officials — grappling with yet another financial conundrum.
Flashback to a year ago, the Republican comptroller general, the accounting czar of the state, tendered his resignation following an unfortunate double-entry glitch in higher education accounts, resulting in a $3.5 billion paper error. The roots of the complication trace back to a technological transition in the 2010s.
Today, the riddle unfolds in cash form, with the elected Republican Treasurer Curtis Loftis, the state’s official check writer, under the spotlight. The tangled financial web is being meticulously scrutinized by investigative accountants, as state Senate leaders speculate that monetary shifts into mystery accounts occurred each time the state’s books appeared unbalanced.
“Politics is no bedfellow of accounting,” uttered Grooms one Tuesday, soon after the Senate approved a constitutional amendment to make the comptroller general an appointed position, a proposal now in the House’s court. He hinted at a possible amendment to make the treasurer an appointed position, pending satisfactory responses to pressing queries.
While the issues that led to the bank account errors remain unresolved, any existing records of how this massive $1.8 billion sum originated have not yet been reviewed by state leaders. “This does not inspire confidence. But the silver lining is, no money was lost,” said Republican Gov. Henry McMaster.
Loftis claims to have invested the elusive funds, generating around $200 million in interest for the state. However, this has raised eyebrows as he chose not to alert the General Assembly about money that may have been set aside for state agencies or possible trust funds. Loftis retorted that such responsibilities did not lie within his office’s realm.
Meanwhile, the communication between the Treasurer’s Office and the Comptroller General’s Office received low marks in an audit of their collaboration. Loftis, who refrained from answering detailed questions from lawmakers, leveraged social media to defend himself, citing political attack and blaming shifting from Comptroller General Brian Gaines.
Gaines, a highly regarded career civil servant, succeeded former comptroller Richard Eckstrom after his sixth-term resignation. He and Loftis are now slated to appear before Groom’s committee in the forthcoming week. Grooms has expressed faith in Gaines’ ability to answer every question posed by his subcommittee.
Memory lane in South Carolina recounts a historical trail of accounting issues. The treasurer’s office itself dates back to 1776 when the state’s first constitution materialized, with the General Assembly selecting the treasurer. However, by the 1800s, the state’s finances were plunged into a chaotic maelstrom, with debt amounts and state credit becoming an enigma.
While the mystery of the $1.8 billion unfolds, lawmakers and residents are acutely aware that this considerable sum remains unspent and unappropriated, especially when $3 billion in requests from state agencies were denied in the recently sanctioned South Carolina House budget for next year.
The state’s legislative leaders and the governor prefer to put on hold any attempts to tap into the account until they can refer to a conclusive report. “That’s a colossal sum, and rushing to spend it is not a necessity,” proclaimed McMaster.
