Beleaguered Republican S.C. Comptroller General Richard Eckstrom tendered his resignation Thursday just weeks after reporting a $3.5 billion accounting error that rollicked the Statehouse.
“Nobody lost one dollar,” one insider told the City Paper in February. “Nobody embezzled one dollar. It’s simply a reporting error.”
But its impact — in its political embarrassment and how national rating agencies might impact the state’s credit rating — eventually was enough for Eckstrom to resign as of April 30 in a letter today to Gov. Henry McMaster. The governor accepted the resignation.
In the letter, Eckstrom wrote, “I hope this will also give members of the General Assembly time to begin the process to elect my replacement and, ultimately, put forth an amendment to the constitution to make the Office of Comptroller General an appointed position, for which I have been a longtime advocate.”
If the office is devolved from being an elected constitutional position, its responsibilities, which include assembling the state’s annual financial report, could be moved to other agencies, such as the Attorney General’s office, the Treasurer’s Office and the Department of Administration, according to an earlier report by The State.
Eckstrom, a former state treasurer who was elected to be the state’s accountant in 2002, admitted in February that the state overstated its cash balances by $3.5 billion over the last 10 years because of double-reporting by his office of some of its spending.
Pressure has been mounting for Eckstrom’s resignation. Last week, state senators said in a report that Eckstrom should be fired for the accounting error and the office changed.
“To ensure accuracy in the state’s finances, all the duties of his office need to be transferred immediately to one or more agencies that will produce documents that we can rely on and have confidence in,” state Sen. Larry Grooms, R-Berkeley, said at the time.
But for a few days, Eckstrom held on after a statement in which he said, “I strongly disagree with the findings of the senators. I will not be distracted by anyone from the work ahead of us, work voters elected me to do during this term.”
About the error
State budget experts emphasize the error wasn’t a shortfall — that the state didn’t lose $3.5 billion of tax dollars — but that the Comptroller General’s office essentially twice counted money transferred to the state’s colleges and universities as a new computer system was installed.
When it wasn’t caught initially, it kept making the same wrong assumption, year after year. Essentially, it kept revenue on its reports after it had already been transferred, making it appear in post-budget spending analysis reports that the state had more of a surplus than what was accurate.
Reports from the Comptroller General’s office reflect past spending and don’t direct current or future spending. In fact, state budget writers use projections from a different office to make budgeting decisions and don’t rely on Eckstrom’s reports of what happened to spending after money has been spent.
Reactions are swift
State leaders quickly reacted to news of Eckstrom’s resignation.
S.C. Rep. Heather Bauer, a freshman Democrat from Columbia, was successful last week in getting the House to adopt a budget amendment to cut Eckstrom’s salary to $1.
“Comptroller General Richard Eckstrom made the right decision by stepping down,” she said today. “The multi-billion 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.”
McMaster thanked Eckstrom for his service and friendship.
“The Eckstrom and McMaster families have been dear friends for decades,” the governor said in a statement. “I know that your every wish has been, and always will be, prosperity and happiness for the people of South Carolina. 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.”
House Speaker Murrell Smith, R-Sumter, said he recognized and respected Eckstrom’s decision.
“I commend him for many years of public service, while also recognizing his decision is in the best interest of our state,” Smith said.
State Treasurer Curtis Loftis, a Republican whose office eventually could inherit some of the comptroller general’s responsibilities, also thanked Eckstrom.
“I am also thankful for the oversight that has been provided by the General Assembly,” he said in a statement. “The state is better off for their efforts.”
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