South Carolina’s Comptroller General Richard Eckstrom is stepping down next month after making a $3.5 billion “accounting error” in the state’s end of year financial report.
The error was initially unearthed by one of Eckstrom’s staffers, junior accountant Katie Kipp, reports the Post and Courier (P&C). Testimony to a state Senate panel revealed that Kipp discovered the state’s Annual Comprehensive Financial Report overstated the general fund balance by nearly 50 percent, reports P&C.
Eckstrom revealed to the Senate Financial Constitutional Subcommittee that for a decade, the Annual Comprehensive Financial Report overstated the money sent to colleges and universities, the Associated Press (AP) reported.
Eckstrom blamed the onset of this crisis on a $12 million coding error in 2007 which he says was then compounded by a shift in computing systems beginning in 2011, reports AP. The same report states the sum of the overstated funds reached $1.3 billion by 2017 and has more than tripled since.
State auditor George Kennedy said Eckstrom ignored warnings of a “material weakness” in the comptroller general’s office for a decade, according to AP.
The Subcommittee determined Eckstrom failed to do his primary job, submitting an accurate annual financial report, properly, according to AP.
Though budget makers do not consult the Annual Comprehensive Financial Report, bond makers do and it is the primary tool credit agencies use to determine the state’s credit rating. “Our cash position has been misrepresented, creditors, bond holders don’t like things like that.” Democratic State Senator Thomas McKelveen told AP
The fallout of the mismanagement has prompted state legislators to shift the comptroller’s office from an elected position to an appointed one, with some lawmakers suggesting the position be done away with altogether. The Senate subcommittee unanimously advanced an amendment to the state’s constitution that would allow the governor to nominate a candidate for Senate approval. State Treasurer Curtis Lofton, another elected Republican, suggested his office should absorb the responsibilities of the flailing Comptroller’s office, AP reports.
In his resignation letter, obtained by AP, Eckstrom stated “I have never taken service to the state I love or the jobs to which I have been elected lightly, endeavoring to work with my colleagues … to be a strong defender of the taxpayer and a good steward of their hard-earned tax dollars.” Governor Henry McMaster accepted his resignation, effective April 30th, saying “I know that your every wish has been, and always will be, prosperity and happiness for the people of South Carolina.”
Eckstrom had served as the comptroller since he was elected in 2003. He ran unopposed in the last two elections. The state Senate will now select a replacement to finish out the Comptroller’s term which ends in 2027.