Senate Panel Holds Treasurer Accountable for Unidentified $1.8 Billion

A state Senate panel probing how the state had $1.8 billion sitting in an account without knowing who it belonged to will hold Treasurer Curtis Loftis accountable.

However, unlike last year when Comptroller General Richard Eckstrom resigned, state Sen. Larry Grooms, R-Berkeley, stated that the committee will not support Loftis’ removal from office at the governor’s request.

On Tuesday, Grooms intends to present his subcommittee’s report on the Senate floor.

The report comes after Loftis, who was reelected in 2022 and has stated that this will be his final term, announced Friday the formation of a task force comprised of representatives from the treasurer’s office, the comptroller general’s office, the state auditor’s office, and the Department of Administration. The governor’s office stated that the task team will “determine the existence, purpose, and intended destination” of the $1.8 billion.

Gov. Henry McMaster charged the group with completing its job by July 1 at a meeting Thursday that also included an assistant attorney general.

“These agencies were involved in the statewide computer conversion that created the fund,” Loftis stated in a Facebook post. “After a year of confusion and disagreement, it’s encouraging to see collaboration and communication. Many gratitude to the governor, the four agency heads, and their respective staffs for making this possible.”

The lack of a removal proposal from the Senate Finance Committee will allow the task group to determine which agencies receive the $1.8 billion.

“The governor believes the public’s confidence is best maintained when elected officials and agencies work together to solve problems through collaboration, cooperation, and communication,” said Brandon Charochak, the governor’s spokesperson. “In that spirit, the governor suggested to Sen. Grooms that this group be given some time to work.”

Loftis formed the group after meeting with McMaster on Monday of this week and spoke with the governor the previous week.

“The rules we use all communicate, collaborate, and cooperate,” McMaster explained to reporters earlier this week. “And there’s several different parties involved in that situation right now and I’m confident that if they can do that they will determine what has happened, how it happened or what’s left and what’s there is to do.”

The treasurer’s office declined to comment on the anticipated report.

Grooms stated that the report of his subcommittee would conclude that the $1.8 billion account was the consequence of a treasury error, for which Loftis-supervised personnel were accountable.

The flow-through account was established by the comptroller general’s office in 2017 at the request of the treasurer’s office as the state transitioned to a new accounting system.

Loftis maintained that the comptroller’s office and auditors were aware of the account. However, lawmakers just learned about it last year.

Comptroller General Brian Gaines, who was chosen to replace Eckstrom last year, informed lawmakers about the existence of the $1.8 billion account.

Eckstrom said this year that he overstated the state’s cash balances in annual financial reports by $3.5 billion over ten years by double counting funds granted to schools and institutions. The double counting is estimated to be worth $5.9 billion, but Loftis claims Eckstrom used the $1.8 billion account to help mitigate the accounting blunder.

A group of senators advocated removing Eckstrom from office for deliberate neglect of duty, which would require a two-thirds vote in both chambers and approval from the governor.