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South Carolina's comptroller quits after a $3.5 billion accounting error

South Carolina Comptroller General Richard Eckstrom holds up a book he wanted to present to his new chief of staff James Holly during his introduction a meeting on Aug. 13, 2009, in Columbia, S.C. Eckstrom is stepping down from his post after a $3.5 billion accounting error.
Mary Ann Chastain
/
AP
South Carolina Comptroller General Richard Eckstrom holds up a book he wanted to present to his new chief of staff James Holly during his introduction a meeting on Aug. 13, 2009, in Columbia, S.C. Eckstrom is stepping down from his post after a $3.5 billion accounting error.

COLUMBIA, S.C. — South Carolina's embattled top accountant will step down next month after a $3.5 billion error in the year-end financial report he oversaw, according to a resignation letter written Thursday that was obtained by The Associated Press.

Republican Comptroller General Richard Eckstrom's decision to leave the post he has held for 20 years came after intense scrutiny of his performance following the blunder and amid rising calls for him to either quit or be removed.

The Senate panel investigating the financial misstatement issued a damning report last week accusing Eckstrom of "willful neglect of duty." As recently as last week, however, Eckstrom had said he would not resign.

"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 ... to be a strong defender of the taxpayer and a good steward of their hard-earned tax dollars," Eckstrom wrote in the letter to South Carolina Gov. Henry McMaster. "They deserve nothing less."

The governor accepted the resignation, effective April 30.

The Senate report concluded that Eckstrom was solely responsible for the mapping error, which happened during the state's transition to a new internal information system from 2011 to 2017. State officials testified that Eckstrom ignored auditors' yearslong warnings of a "material weakness" in his office and flawed cash reporting.

Eckstrom has said the Annual Comprehensive Financial Report exaggerated the state's cash balances for a decade by double counting the money sent to colleges and universities. The mistake went unsolved until a junior staffer fixed the error this fall.

Officials have said the overstatement did not affect the state budget. But lawmakers alarmed by Eckstrom's inconsistent testimony slammed his failure to fulfill one of his primary constitutional duties: to publish an accurate account of state finances.

The fallout may lead to other changes for the comptroller's office

The fallout for the state agency that typically flies under the radar is expected to continue. A Senate subcommittee recently approved a joint resolution that would let voters decide whether the comptroller general should continue as an elected position or be appointed by the governor. Eckstrom reiterated his support for that change Thursday in his resignation letter.

The next comptroller general may also lead a much weaker office. The investigating panel suggested its responsibilities be transferred to one or more agencies. State Treasurer Curtis Loftis, an elected Republican, has testified that his office could absorb the main tasks.

Republican Sen. Larry Grooms, who led the investigation, said the comptroller general's office could also be "done away with altogether."

Grooms thanked Eckstrom for doing the "honorable thing" and sparing the General Assembly from using an obscure state constitutional provision to remove him from office.

Between a 104-7 House vote to cut the comptroller general's annual salary to $1 and the Senate's scheduled April 11 vote to oust Eckstrom, Grooms suggested the rising heat had grown too intense for him to remain on the job.

The state Senate will select a replacement for Eckstrom

The Senate must now select a replacement to serve out the rest of Eckstrom's term, which ends in 2027. Grooms said the next comptroller general should be someone who recognizes that their job is to spend the next three years overseeing the office's incorporation into other state agencies. He does not anticipate any other heads will roll.

"The buck stopped with him," Grooms said. "The accountability was with him."

A certified public accountant, Eckstrom, 74, spent four years as state treasurer before assuming his current office. He has run unopposed in the past two elections and last faced a Republican primary challenger in 2010.

McMaster — who had resisted calls for impeachment and endorsed elections as the proper vehicle for accountability — thanked Eckstrom for his 24 years of "dedicated service." The governor previously served as the state's attorney general alongside Eckstrom early in the comptroller general's tenure.

"The Eckstrom and McMaster families have been dear friends for decades," McMaster said Thursday in a letter accepting the resignation. "I know that your every wish has been, and always will be, prosperity and happiness for the people of South Carolina."

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The Associated Press