Outside auditors testify again on S.C.’s $1.8B discrepancy
COLUMBIA, S.C. - More answers are coming to light at the State House about South Carolina’s $1.8 billion mystery.
The issue has been a focus of legislators for more than a year now, centering on a reported surplus sitting in state s, unspent, that turned out to be the result of a years-long ing error, according to independent auditors hired by the state.
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Those auditors, from the Washington, D.C.-based firm AlixPartners, testified before a Senate subcommittee in January, shortly after issuing their report that found the surplus did not exist.
Now — after more testimony was taken from the main parties involved, include South Carolina’s elected treasurer — the auditors came back Tuesday to clarify some of those comments from others.
“As we sit here today, what would be — and this is a question for each of you — one misstatement that gives you the greatest concern?” Sen. Margie Bright Matthews, D – Colleton, asked the two auditors.
They especially focused on Treasurer Curtis Loftis’ testimony before senators two weeks ago.
Loftis repeatedly pointed the finger at the comptroller general’s office for the error, which the auditors noted they determined to be a shared responsibility.
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They said a report the treasurer’s office published the night before Loftis testified to senators was “factually inaccurate” in parts and appeared to be, in part, an attempt to put blame on the comptroller general.
The auditors also took issue with an assertion from the treasurer that he ed their report with flying colors and that they found he, as the state’s banker, had properly managed and ed for the state’s cash.
“I don’t think we would be here if everything was properly ed for,” AlixPartners Investigations, Disputes & Advisory Director Dave Bligh said.
The error was made about a decade ago, when the state converted from an old ing system to a new one.
Their audit found the offices of the treasurer, comptroller general, and state auditor all knew about this error for years, but no one told lawmakers about it until late 2022.
“That’s where the rub is with me on the whole thing: the fact that you’ve got a problem that’s acknowledged by the treasurer, that’s acknowledged by the auditor, that’s acknowledged by the comptroller general, and that the General Assembly is never notified about it. And we’re not talking chump change,” Sen. Ronnie Sabb, D – Williamsburg, said.
Bligh said they viewed the main issue differently, acknowledging they did not know if there were reporting requirements for this type of discrepancy to the General Assembly.
“I think it’s our view that they didn’t truly understand what it was, so where we see the fault is not truly investigating and understanding what it was,” Bligh said.
The Senate Finance subcommittee that heard Tuesday’s testimony, as part of its long-term investigation into this situation, plans to issue a final report on this matter with recommendations at a later date, potentially as early as next week.
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