South Carolina Uncovers $1.8 Billion Surplus – Origins Remain a Mystery

An unexpected sum of $1.8 million has popped up in a South Carolina state account, and it is now causing conflict amongst state officials who don’t know where it came from or how it should be used.

Secret $1.8 Billion Fund

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South Carolina state officials recently discovered $1.8 billion in funds lying in state accounts. The problem? No one appears to know where it came from or what it was originally meant to be spent on.

Getting to the Bottom of It

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The billion-dollar surplus has been sitting in state accounts for over five years. Now state hearings and investigations are being launched to get to the bottom of the mysterious fund.

Infighting in the House

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Government agencies, lawmakers, and state representatives are becoming increasingly agitated, resulting in finger-pointing, infighting, and speculation.

Something Is Wrong

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“There’s something wrong somewhere,” said Republican Governor Henry McMaster. “We don’t know why it’s there, what it’s supposed to be used for, how long it’s been there – that’s a problem.”

13% of the Budget

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It’s a substantial amount to overlook for so long. Considering South Carolina’s annual state budget is $13.8 billion, these resurrected funds represent a 13% boost to the budget.

Ideas Pop Up

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Some have suggested that funds from the state books had been continuously shifted to the account for years, whenever the books needed to be balanced, and had been promptly forgotten about.

Across State Departments

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Others proposed that the funds could belong to different state departments, including the Department of Transportation, an environmental trust fund, and more. But so far none of these suggestions have been proven.

A Heated Hearing

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A heated State Senate hearing on Tuesday stirred up even more controversy around the funds. Republican State Treasurer ​​Curtis Loftis spent six hours being grilled by Senators and vehemently defending both himself and his office over the issue.

Conflict Between Treasurer and Comptroller

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Loftis blamed the state accounting systems, which were changed in the mid 2010s, as well as the comptroller general’s office for failing to give his team necessary information to investigate the account.

“Nobody Will Give Us Information”

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“You cannot conceive of the work we’ve done; it got dumped on us because of the failure of another office,” Loftis said. “We are reconstructing the books as best we can over the last seven years, and nobody will give us information.”

A Breach of Trust?

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He was then accused of “breaching public trust” by Republican Sen. Larry Grooms. “Apparently Mr. Loftis has lost control of the state treasury,” he told the General Assembly.

Bold Accusations

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“Mr. Loftis has abrogated his responsibility as a state treasurer. He has breached the public trust,” he concluded.

New Comptroller Puts Foot Down

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The states new Democrat comptroller general Brian J. Gaines has also defended himself and his office in the face of Loftis’ accusations.

He stated that it is the treasurer’s responsibility to keep a track of state funds and accounts, not the comptroller’s office.

It “Flies in the Face of Evidence”

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“The treasurer believes his own PR, which flies in the face of evidence,” Gaines told reporters. “Every treasurer for 80 years or more has been able to reconcile cash, including Treasurer Loftis until 2016.”

Closing the Books

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In fact, the new comptroller was the very reason that the funds were discovered, according to Senator Grooms, who told CBS News19 that “the new comptroller trying to close the books alerted us to what appeared to be something wrong with one account within our state’s finances.”

Does It Exist?

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Confusion around the mystery fund has reached a point that some involved in the hearing even questioned its existence.

Sen. Tom Young Jr. directly asked Loftis if he was “sure [the $1.8bn] exists?” to which Loftis responded, “We believe that to be the case.”

Where to Allocate It

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Whatever the source or intended purpose of the $1.8 billion, one thing is clear – the infighting in the South Carolina state government will continue as different departments clamor to allocate the funding.

“Everyone Wants a Piece”

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“Everyone wants a piece,” said Grooms. “You’ll have the House and Senate fighting over how to appropriate it—taxpayer rebates, highway construction, new school construction.”

No Need to Rush

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But Gov. McMaster has taken a calm, level-headed approach to the future of the funds, urging lawmakers not to “rush out and spend that money.”

More to Find Out

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“We don’t know where it was supposed to go, what [its] purpose was supposed to be, anything else at this point,” he said. “I think we need to find that out. But it’s a blow to confidence. But we get better after things like this.”

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The post South Carolina Uncovers $1.8 Billion Surplus – Origins Remain a Mystery” first appeared on From Frugal to Free.

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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.

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