Bid opens to fire SC comptroller for $3.5B accounting error

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FILE - 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 at the Budget and Control Board meeting, Aug. 13, 2009, in Columbia, S.C. Pressure is mounting for Eckstrom after a $3.5B accounting error. (AP Photo/Mary Ann Chastain, File)

COLUMBIA, S.C. – South Carolina lawmakers angry over a $3.5 billion accounting blunder by the state's comptroller general began efforts Thursday to sack the official, a day after demanding he quit or be fired.

Comptroller General Richard Eckstrom told senators last month he had unintentionally exaggerated the state’s cash position by $3.5 billion by overstating the amount the state had sent to colleges and universities for a decade. He has signaled he won't resign.

The error wasn’t in actual cash, but in the way the state reports its balance sheets. It could affect South Carolina’s credit rating and has eroded confidence that a large number of lawmakers in the Republican-dominated state had in Eckstrom.

A resolution introduced Thursday seeks a two-thirds vote from the House and the Senate to trigger a state constitutional provision that says the governor should remove Eckstrom for “willful neglect of duty.”

The constitution allows Eckstrom a hearing in his own defense, although the exact procedure isn’t clear. Several senators couldn’t remember this process being used since it was added to the constitution more than 50 years ago.

A certified public accountant, Eckstrom, 74, has spent 20 years as comptroller general and before that four years as state treasurer.

“At least for a decade we know that he has signed his name, Richard Eckstrom, CPA, on our state's closing financial document and every year he has been wrong," said Republican Sen. Larry Grooms, who is sponsoring the resolution.

Grooms said the legislature needs to act because Eckstrom isn't doing "the honorable thing" and resigning.

Thirty-eight of 46 senators signed on to sponsor the proposal. Just 30 are needed for the two-thirds threshold to pass. In the House, the resolution needs 83 of 124 votes.

Grooms said he expects once Eckstrom is dealt with the Senate will take up other matters his subcommittee recommended like dismantling his agency and sending its duties to other offices.

The error started as a $12 million coding error in 2007 and was compounded when the state switched accounting systems in 2011, Eckstrom told senators at hearings in the past few weeks.

State cash transferred to colleges and universities was being double counted and auditors said Eckstrom ignored repeated warnings about the problem. They said he waited five years to conduct a full review of accounts that eventually assisted in uncovering the problem about a year ago.

Eckstrom responded to the Senate report with a statement Wednesday saying he isn't quitting. He said his office worked tirelessly to find and then fix the problem which it first started cropping up in 2013. The problem wasn't reported to lawmakers or others in the government until months ago.

Eckstrom said he would support a constitutional amendment making his job appointed by the governor instead of elected, but in the meantime “I will not be distracted by anyone from the work ahead of us, work voters elected me to do during this term.”

Eckstrom has run unopposed by anyone in the past two elections and last had a challenger in the Republican primary in 2010.

Republican Gov. Henry McMaster said last week that Eckstrom should be held accountable by voters and not impeached.

The resolution requires a lower level of wrongdoing of willful neglect of duty, where impeachment requires “serious crimes or serious misconduct" according to the constitution.

McMaster's office said Thursday that this week's events had not changed his mind.

Exactly what happens next isn't known. The constitution allows Eckstrom a hearing if he wishes.

“We're consulting ... right now to ensure we do the correct procedures," Grooms said. "He'll have an opportunity to rebut.”