South Carolina’s Comptroller Quits After A $3.5 Billion Accounting Error

0
452

After making an $3.5 billion accounting error in South Carolina’s financial report at the end of the year, Richard Eckstrom, South Carolina’s Comptroller General, will be stepping down.

According to the Post and Courier, Katie Kipp (junior accountant), Eckstrom first discovered the error. P&C reports that Kipp testified before a state Senate panel and discovered that the state’s Annual Comprehensive Financial Report had overstated its general fund balance by almost 50 percent.

Eckstrom disclosed to the Senate Financial Constitutional Subcommittee, that the Annual Comprehensive Financial Report (AP) overstated money sent to universities and colleges for a decade.

Eckstrom attributed the onset and severity of this crisis to a $12 million coding mistake in 2007. This error was followed by a shift in computing systems that began in 2011. According to the same report, the total overstated funds had reached $1.3 billion in 2017 and has more then tripled since.

According to AP, George Kennedy, the state auditor, said Eckstrom ignored warnings about a “material weakness in the comptroller general’s office for a decade.

Eckstrom was not able to complete his primary job of submitting an accurate financial report each year, as required by AP.

Although budget makers don’t consult the Annual Comprehensive Financial Report (bond makers do), it is used by credit agencies to establish the state’s credit rating. “Our cash position was misrepresented, creditors and bond holders don’t like things like this,” Thomas McKelveen, Democratic State Senator, told AP

State legislators have decided to make the comptroller’s position an appointed position instead of an elected one due to the mismanagement. Some lawmakers even suggested that the position be eliminated altogether. A Senate subcommittee approved a constitutional amendment that would allow the governor nominate a candidate to be approved by the Senate. Another elected Republican, Curtis Lofton is the State Treasurer. He suggested that his office should take over the responsibilities of the flailing Comptroller, according to AP.

Eckstrom wrote that he had not taken office in the state he loves or the jobs for which I was elected lightly. He also stated that he would work with his colleagues to “be a strong defender and steward of taxpayer dollars.”

Eckstrom was the comptroller from 2003 until he was elected. In the two previous elections, he ran unopposed. The state Senate will now choose a replacement for the Comptroller, whose term ends in 2027.