SC lawmakers want to fire comptroller for $3.5B error

South Carolina Comptroller General Richard Eckstrom holds up a book he wanted to present to his...
South Carolina Comptroller General Richard Eckstrom holds up a book he wanted to present to his new Chief of Staff James Holly during his introduction at the Budget and Control Board meeting, Aug. 13, 2009, in Columbia, S.C. Pressure is mounting for Eckstrom after a $3.5B accounting error.((AP Photo/Mary Ann Chastain, File))
Published: Mar. 15, 2023 at 6:58 PM EDT
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(AP) - South Carolina’s comptroller should be fired over his $3.5 billion accounting error and the office he runs should be gutted, lawmakers investigating the mistake said in a report Wednesday.

Republican Comptroller General Richard Eckstrom has attracted mounting scrutiny since he first told lawmakers last month that he had unintentionally exaggerated the state’s cash position by $3.5 billion by double counting the money sent to colleges and universities.

In the report released Wednesday, the Senate Finance Constitutional Subcommittee concluded Eckstrom failed to do his job properly and should be removed from office. In South Carolina the comptroller—the state’s chief accountant—is elected.

The panel recommended the state comptroller’s office be dismantled. It also recommended transferring duties, such as compiling South Carolina’s annual financial report, to one or more agencies.

The report capped a tumultuous five weeks for the 20-year veteran of a state agency that typically flies under the public radar.

The accounting mistake started as a $12 million error in 2007 but compounded over time, Eckstrom has said. Officials say it calls into question if Eckstrom can fulfill his duties, and if his elected position should exist.

Subcommittee members determined that Eckstrom’s actions did not rise to the level of an impeachable offense. But they urged South Carolina’s General Assembly to relieve the comptroller of the position he’s held for two decades “for willful neglect of duty,” as allowed by the state Constitution.

State Treasurer Curtis Loftis, an elected Republican, said his office could absorb the main responsibilities of the comptroller.

The comptroller general oversees the production of the state’s Annual Comprehensive Financial Report. That responsibility includes determining which cash expenditures to include or exclude in the yearend report, a process also known as “mapping,” according to Department of Administration Executive Director Marcia Adams. That task got more complicated during a gradual shift to a new statewide information system between 2011 and 2017.

Adams said Eckstrom incorrectly mapped the money sent to higher education. Adams said the mistake amounted to “human error” but stopped short of calling it “negligence.”

The error arose in just three percent of approximately 1,000 accounts that were incorrectly mapped, state Auditor George Kennedy said. Auditors never caught the mistake because those 30 accounts never made the random samples tested to confirm the report’s accuracy.

But auditors said they had long raised red flags.

For 10 years, Eckstrom did not respond to warnings that a “material weakness” existed in the comptroller general’s office, according to Kennedy. He said the internal controls over the Annual Comprehensive Financial Report’s preparation were insufficient to detect and correct errors in a timely manner. Around 2017, Kennedy said his office told the comptroller general’s team that a full reconciliation would help. That did not happen until last spring.

Eckstrom partially blamed the error on communication problems with the treasurer’s office as the two teams operated on different internal accounting systems.

But Loftis, the state treasurer, said no issues had ever been brought to his attention.

Eckstrom appeared multiple times before the Senate Finance Constitutional Subcommittee after he first publicly revealed the news on Feb. 9. His inconsistent testimony the following week alarmed members leading the probe.

Most recently on March 7, Eckstrom emphasized his competence as a leader who rightfully hired the proper personnel to solve the inconsistencies. He added that his office and auditors who certify the work share responsibility for the report’s accuracy. Everyone involved knew the numbers did not line up perfectly, Eckstrom said, but nobody believed they amounted to “a material difference.”

“I wasn’t happy with the fact that we did reconciliations year after year that didn’t tie out precisely,” Eckstrom said, adding that’s the reason he hired personnel to identify the problem.

Senators’ recommendations came as House lawmakers similarly took aim at the embattled comptroller general.

On March 2, Republican Rep. Gil Gatch and Democratic Rep. Heather Bauer called for an impeachment inquiry into whether Eckstrom committed serious misconduct including “dereliction of duty” and “breach of the public trust.”

This week, Bauer sponsored an amendment to reduce the comptroller general’s newly increased $151,000 salary down to $1 during the remainder of Eckstrom’s time in office. The amendment passed by a 104-7 vote. The budgeting process must undergo several more steps to cement the salary change. House Speaker Murrell Smith called it a “tripartisan agreement” since it garnered support from Republicans, Democrats and the hardline conservative Freedom Caucus.

Republican Gov. Henry McMaster said last week that elections, not weaponized impeachments, are the proper form of accountability. Eckstrom ran unopposed in this fall’s general election. His name is not set to appear on a ballot until 2026.

Eckstrom testified that he has hired a lawyer to provide communications consulting, and, if necessary, legal advice.

“I hope he won’t have to,” Eckstrom told lawmakers.