South Carolina Made $3.5B Accounting Error
State lawmakers in South Carolina are trying to get to the bottom of a $3.5 billion accounting error that has been attributed to an “admittedly complex mapping problem,” according to The Associated Press.
Lawmakers on a state senate finance subcommittee grilled the state’s Comptroller General, Richard Eckstrom, for several hours last February, but are still not satisfied with his answers. Republican Sen. Larry Grooms noted multiple contradictions in the testimony, and told The AP, “a $3.5 billion error is no small error. And to treat it as such does a disservice to the people of our state who have to have confidence in their elected officials.”
Mismanagement of South Carolina’s financial reports has been an issue for decades. A 2007 coding error and subsequent migration to a new system in 2011 resulted in double counting of state funds sent to colleges and universities.
The inaccuracies have continued to compound, with the total overstatement of funds growing to $1.3 billion in 2017, and that number has since nearly tripled to $3.5 billion as more funds were sent to universities throughout the pandemic.
While these errors didn’t affect the available cash on hand for the state to make expenditures, bond rating agencies consider these financial reports to assign grades, and some lawmakers expressed concern that these errors would affect the state’s bond ratings in the future.
A Fortune 500 company would likely be fined by a regulatory agency or go out of business if it had an error of this magnitude on its books for decades. In government, the taxpayers pay the price for these egregious mistakes.
The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com
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