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After $3.5 Billion Accounting Error, South Carolina Comptroller Could Be Ousted

Some state senators have suggested Richard Eckstrom be fired and the office stripped of several responsibilities.

Comptroller General Richard Eckstrom speaks as he celebrates his election win during celebration at the University of South Carolina Alumni Center in Columbia on Tuesday, Nov. 08, 2022. (Tracy Glantz)

By Joseph Bustos and Javon L. Harris, The State (TNS)

After South Carolina Comptroller General Richard Eckstrom’s office made a multibillion mistake, a panel of Senate budget writers are suggesting the Republican be removed from his position and the office stripped of several responsibilities.

Under the recommendations unveiled March 15 by senators who oversee the comptroller general’s budget, the comptroller’s responsibilities, which include assembling the state’s annual financial report, would be moved to other agencies, such as the Attorney General’s Office, the Treasurer’s Office and the Department of Administration.

“To ensure accuracy in the state’s finances, all the duties of his office need to be transferred immediately to one or more agencies that will produce documents that we can rely on and have confidence in,” said state Sen. Larry Grooms, R-Berkeley.

The panel also recommended the state constitution be amended to eliminate the office. That would require a statewide referendum, a proposal State Sen. Chip Campsen, R-Charleston, introduces every session. In South Carolina, the comptroller general is an elected office.

Senators want these changes made because Eckstrom misreported the state’s cash balances for 10 years, inflating the state’s cash position by $3.5 billion.

“In the history of accounting errors, this is probably one of the largest if not the largest accounting error,” Grooms said. “A lot of people depend on the accuracy (of the state annual financial report), namely the rating agencies in New York that grades our bond,” and determines how much interest the state pays in borrowing money.

Eckstrom, the state’s chief accountant and top fiscal watchdog, is in charge of running the state’s payroll, paying vendors, helping other agencies with the accounting system and assembling the state’s annual financial report.

“The people in the state of South Carolina deserve to have accurate reporting with our state’s finances, that has to be done, and if the comptroller is unable to do it, we’ll have to find someone that can,” Grooms said.

Eckstrom, who has vowed not to resign, said in a statement he disagreed with the Senate  panel’s analysis.

“My team and I worked tirelessly to identify the cause of a complex problem,” Eckstrom said. “Once we identified the cause of the problem, we worked with stakeholders to correct it. I have made this clear to those who have asked and I will continue to. We remain committed, more than ever, to collaborating with state agencies, and legislators to make sure the work taxpayers elected us to do is done efficiently, effectively and transparently.”

Eckstrom even added that he would advocate to make the comptroller general’s office an appointed position.

“I have long been an advocate of restructuring state government to make it more responsive to the people,” Eckstrom said.

A panel of state senators investigated the error and heard hours of testimony from Eckstrom, an accountant on his staff, the Treasurer’s Office, the Department of Administration, the state auditors and outside auditors.

A bipartisan group of House members have called for Eckstrom’s impeachment, which allows the General Assembly to remove a statewide elected official for criminal acts.

However, a statewide constitutional officer can also be removed from office for willful neglect if two thirds of each legislative chamber votes to do so. The governor would have to then take the final action.

“We believe that the General Assembly should begin proceedings to remove the comptroller from office pursuant to … the South Carolina Constitution for willful neglect of duty or other reasonable care,” Grooms said, adding that he didn’t believe Eckstrom’s actions were criminal and, therefore, doesn’t warrant impeachment.

Gov. Henry McMaster has said the General Assembly should resist the urge to impeach  Eckstrom because the decision about whether he could stay in office should be left up to voters.

Grooms, who is leading the investigation into the $3.5 billion error, says there’s a lack of confidence in Eckstrom, who was reelected in November after running unopposed. Eckstrom was first elected to the office in 2002.

Last month, Eckstrom disclosed that his office double counted money sent to state colleges and universities for 10 years, an amount totaling $3.5 billion. The error resulted in a massive overstatement of the state’s cash balances in the annual comprehensive financial report.

Eckstrom also underreported the Department of Transportation’s financial position by about $500 million as well over-reporting other parts of the state government by $4 billion.

The net amount he was off by is about $3.5 billion, but in total $4.5 billion was misreported.

The error however is not having an effect on budget deliberations because lawmakers use revenue projections when deciding on a spending plan, as opposed to money that has already come in and been allocated.

Even though the Treasurer’s Office, Department of Administration and State Auditor and outside auditor have pointed to the comptroller, Eckstrom said others shared in responsibility.

“I think that the state as a whole has a responsibility,” Eckstrom said during a recent hearing. “I use (what) I think is a very competent staff that I have to make a very determined effort to get it right, to get the financial statements right.”

Late Monday night, the South Carolina House voted to reduce Eckstrom’s annual pay to $1 from $151,000, a move that could be supported in the Senate.

“If he’s not removed from office, receiving $1 a year and not having any duties really should send a message that he should step down,” Grooms said.

House Ways and Means Chairman Bruce Bannister, R-Greenville, said he expected the salary to ultimately be reinstated by budget writers.

“This body wanted to send a message that they’re unhappy with the performance,” Bannister said. “At the end of the day, we’re not going to not pay the salary that we’ve committed to. But it was more of a political message. Accidentally misplacing or miscounting $3 billion is not acceptable.”


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