$1.8 billion found SC ‘mystery’ account, U of SC professor explains

SOUTH CAROLINA (QUEEN CITY NEWS) — $1.8 billion is a lot of money.

South Carolina state officials found it in a mystery account this week. The discovery has leaders scratching their heads about not only its source but where it’s supposed to go.

“It does raise several questions about what is actually going on and who is ultimately responsible,” says Kirk Randazzo, the Political Science and Department Chair at the University of South Carolina.

The issue is between two different state officials – State Treasurer Curtis Loftis — and Comptroller General Brian Gaines. Their offices are supposed to hold each other accountable and ensure the accuracy of state finances.

Loftis says he invested the money in the mystery account, making nearly $200 million in interest for the state. That led to questions about why he didn’t inform lawmakers about the money.

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But Loftis says it’s not his job to report that information.

“Communication broke down between the treasurer and the comptroller general and it was the comptroller general who found the $1.8 Billion,” Professor Randazzo said. “This is an individual who has been appointed to that position just within the last year. So as part of his hand of getting up to speed, he’s been going through the books and making sure that all the money is accounted for. And he’s the one that found this additional revenue.”

Gaines reported the issue to state lawmakers.

Both leaders must testify before the state senate finance committee about what happened.

Gaines told Queen City News in a statement: “The existence of the fund is not the issue. The fund is designated as a non-reportable “pass-through” fund that should always maintain a $0 balance. The $1.8 Billion was never removed by the Treasurer’s Office (which controls the fund) from the fund and assigned to the appropriate fund. The issue is what was the source of the $1.8 Billion and in what fund does it appropriately belong.

The Comptroller General is committed to working with any stakeholders to resolve this matter on behalf of the citizens of South Carolina. CG Gaines is focused on measures to mitigate potential accounting errors in the future, and staff are working to implement recommendations provided in the Mauldin and Jenkins report.”

“That absolutely could affect the budget, because it means that there’s a $1.8 Billion basically debit coming to the state at some point in time,” Randazzo said.

Governor Henry McMaster says the news doesn’t inspire confidence but he’s glad no money was lost.

“That’s a lot of money. And there’s no need to hurry up and try to spend money. We don’t know where it was supposed to go or what the purposes were supposed to be. Anything else. At this point, I think we need to find that out. But we are it’s it’s a blow to confidence, but oh, we get better after things like this,” the Governor said.

Queen City News reached out to the Loftis’ office but did not receive a response back in time for this report.

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