South Carolina’s top accountant to resign after $3.5 billion accounting error

Tribune Content Agency

COLUMBIA, S.C. — South Carolina’s top accountant Richard Eckstrom says he will resign effective April 30 after disclosing to state lawmakers that he inflated the state’s cash balances for a decade, eventually reaching about $3.5 billion.

In a Thursday resignation letter to Gov. Henry McMaster, the comptroller general reiterated his advocacy that the Legislature move forward on legislation for a constitutional change to make his position appointed by the governor, rather than elected every four years by the voters.

“Over the course of my time in public office I have taken great pride in the responsibility trusted to me,” Eckstrom, 74, wrote in his letter to McMaster, obtained by The State Media Co. “I have been humble in my approach to the job an attribute I hope our constituents have recognized and will remember.”

Eckstrom’s early resignation means the General Assembly will nominate and elect the next comptroller general during a joint assembly to be scheduled at a later date. Eckstrom’s leave also means he’ll avoid a trial in the Senate, a hearing legislators were soon going to announce would start April 11.

The last time the General Assembly picked a new statewide constitutional officer was in 2007, after then-Treasurer Thomas Ravenel resigned following his indictment on drug charges.

“The resignation of the comptroller general is the appropriate thing to do. It saves the Senate from further action,” GOP Senate President Thomas Alexander said in a Thursday statement. “I commend the hard work of Chairman (Harvey) Peeler and the subcommittee led by Sen. (Larry) Grooms that brought these issues to light.”

McMaster said in a letter to Eckstrom that he accepted his resignation, thanking him for his service and friendship.

“I know that your every wish has been, and always will be, prosperity and happiness for the people of South Carolina,” McMaster wrote. “Your 24 years of dedicated and honorable service in the constitutional offices of treasurer and comptroller general have been widely recognized, and your contributions too numerous to list.”

Eckstrom, the state’s chief accountant and fiscal watchdog, was first elected comptroller general in 2002 and last reelected in 2022 after running unopposed. His office is in charge of running the state’s payroll, paying vendors, running the state’s accounting system and compiling an annual comprehensive financial report.

The comptroller general’s decade-long $3.5 billion error for years only appeared in the annual comprehensive financial report, which isn’t used by lawmakers when they write the budget, meaning no actual dollars are missing and the mistake won’t affect state spending. However, lawmakers said the error could affect South Carolina’s bond rating, which determines how much interest the state pays when it borrows money.

“I recognize and respect Comptroller General Eckstrom’s decision to resign,” GOP House Speaker Murrell Smith said in a statement. “I commend him for many years of public service, while also recognizing his decision is in the best interest of our state.” Eckstrom’s resignation followed calls for his impeachment by some House members. A group of senators had also proposed removing Eckstrom from office for willful neglect of duty, a move requiring a two-thirds vote of both chambers and action by the governor.

McMaster had recommended lawmakers resist impeachment, instead leaving the decision up to voters to decide Eckstrom’s fate. The last time lawmakers held an impeachment trial was in 1876, when Spartanburg County Judge Montgomery Moses was impeached after he didn’t allow a grand jury to investigate government officials.

A job with a $151,000 a year salary, this month House lawmakers voted to reduce Eckstrom’s salary in the state budget to $1, a move meant to send a message about their disappointment. The House Judiciary Committee also had planned to have a panel of lawmakers start considering the Eckstrom impeachment resolution.

“Comptroller General Richard Eckstrom made the right decision by stepping down,” said state Rep. Heather Bauer, a Democrat, who sponsored the budget amendment to slash Eckstrom’s salary. “The multibillion-dollar mistake he made was inexcusable. Now, the House and Senate must continue the investigation into the accounting error and add guardrails to make sure this never happens again.”

State Sen. Larry Grooms, who led a Senate Finance Committee panel that investigated the $3.5 billion error, called Eckstrom’s resignation “a sad day” in the state.

“I am thankful that Comptroller General Eckstrom heeded my suggestion last week that he do the honorable thing and resign, and he has done so,” Grooms, a Republican, said. “It spares the General Assembly from having to use an obscure part of our Constitution to actually remove him from office.”

Before his election as comptroller general, Eckstrom, a certified public accountant, served as state treasurer from 1994 to 1998.

In his tenure as comptroller, Eckstrom yearly called on lawmakers to use surplus budget money to address the state’s pension debt, which reached $24.5 billion last year, rather than spend money on member projects, traditionally called earmarks.

The $3.5 billion accounting blunder was the latest controversy for Eckstrom. In 2006, Eckstrom had to reimburse the state $670 for using a state van to go on a family vacation to Minnesota.

“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, from constitutional officers to members of the general assembly, to be a strong defender of the taxpayer and a good steward of their hard-earned tax dollars,” Eckstrom said in his resignation letter. “They deserve nothing less.”

To replace Eckstrom mid-term, lawmakers will nominate candidates for comptroller general. The House and Senate will hold a joint assembly where they will vote until a candidate for the job receives a majority of support from the 170 lawmakers.

Grooms told reporters on Thursday that he expected candidates to start campaigning soon, but declined to speculate who could get the role.

“I’m certain there’ll be plenty of people who would want the job,” he said. “It is a high-profile statewide position.”

Whoever wins the job, however, may only be in the position for about three years.

Both chambers have legislation to amend the state Constitution to make the comptroller a governor-appointed position, with Senate confirmation, instead of it being elected every four years.

“I would say that it should be someone who firmly understands that it will be just for three years,” Grooms said.