COLUMBIA, S.C. (WCIV) — $1.8 billion Found in state bank account Gov. Henry McMaster announced Wednesday that it is considered “non-existent” in 2024.
The governor's statement comes after AlixPartners released its final report on the state Department of Treasury's forensic accounting review. Read his full statement below.
This comprehensive forensic accounting report confirms a $1.8 billion surplus. No money is lost or stolen. Funds do not exist. It was also determined that unintentional accounting errors were made by various parties involved in the state government's transition from the old to the new accounting system. I am confident that the corrective actions recommended in the report will be accepted by the parties and the General Assembly to ensure that something like this never happens again.
In March 2024, the state auditor general's office “discovered” and reported nearly $1.9 billion in bank accounts that appeared to have been slowly collected over several years.
Lawmakers expressed frustration with Loftis, with Republican Sen. Larry Grooms even saying at the time that the state treasurer had “betrayed the public's trust.”
Read more |Where did the $1.8 billion go? South Carolina senator says state treasurer betrayed public trust”
Now, we finally have some answers.
You can read the full report herewhich seems to largely confirm Mr. McMaster's assessment. It said the issue dates back to 2007, when South Carolina transitioned from the previous STARS accounting system to the new SCEIS system.
The report explained that the $1.8 billion represents an effort by State Treasurer Curtis Loftis' office to balance bank general ledger accounts and individual banks' cash balances in the new SCEIS accounting system. According to the report, the state Treasury will record inputs into the new accounting system into the two funds and separate them individually before offsetting the state's past banking transactions from the old STARS accounting system with entries in those two funds. The plan was to match the balance in the bank account.
Read more |Lawmakers search for answers after $1.8 billion found in state bank account”
AlixPartners said it was the intention that the total cash balances of these funds would be zero at the end of the bank conversion, but the conversion “did not proceed as intended and Fund 3,035,0993 ended up with $1.8 billion in cash balances.” Cash was (and is) being accumulated.” balance,” the report says.
They say incorrect journal entries made during the second phase of the Treasury Department's conversion plan meant that about $1.6 billion of the $1.8 billion was “not actual cash,” meaning it was not spent or misappropriated by the state. I concluded that it is not possible. The remaining $200 million is not surplus cash but is included in cash balances filed by Loftis' office that belong to the state general fund, the report said.
The report makes several recommendations to prevent further problems with the state's finances, as well as recommending ways to correct inaccuracies that led to a phantom $1.6 billion to balance the state's books. There is.
Treasurer Loftis posted a video on YouTube thanking AlixPartners for verifying “what we've known all along,” and encouraging them to review the report and “make changes to the system where necessary.” He said he looks forward to supporting them.
