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Earlier this month, FITSNews reported on a smoking gun directly implicating the office of interim South Carolina comptroller general Brian J. Gaines in connection with $1.8 billion in unaccounted for government funds.
The missing money – which governor Henry McMaster insists is a phantom “amalgamation” – stems from chronic financial mismanagement under Gaines and (most notably) his predecessor, former S.C. comptroller Richard Eckstrom.
The state’s accountant from 2003-2023, Eckstrom resigned under pressure two years ago after disclosing that his office had uncovered a $3.5 billion “anomaly” in the state’s general fund budget. Later revelations pushed this imbalance to a whopping $5.8 billion. According to Eckstrom, the anomaly was attributable to “differences in the way the state was accounting for cash that was transferred over to colleges and universities” during the Covid-19 pandemic.
After lawmakers failed to do their job and select a new comptroller, Gaines has continued to make a mess of the state’s books – which, incidentally, are currently the focus of an ongoing federal investigation.
State lawmakers – led by senator Larry Grooms of Bonneau, S.C. – are eager to pin additional blame for the fiasco on state treasurer Curtis Loftis. The problem with their witch hunt? A January 2025 report prepared by Alix Partners determined the overwhelming onus for the problem resided within the comptroller’s office – which it determined to be understaffed, unaccountable and politically driven.
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Of the dozens of recommendations put forward, only one was exclusively tied to the treasurer – a call for new “policies and procedures” related to the reporting of cash and investments in its custody. Conversely, numerous recommendations targeted demonstrable failures on the part of the comptroller general and his staff.
On February 2, 2025, the ante was upped when our media outlet published a letter (.pdf) from the comptroller which made it abundantly clear it was his office – not the treasurer’s office – which directed these phantom funds into “appropriate” accounts so “the state (could) gain the benefit of the money.”
In other words, so fiscally liberal lawmakers like Grooms could spend it…
For his part, Loftis took the same public position that we did – that any actual, available cash associated with any accounting errors must be returned to taxpayers. Immediately.
This week, Loftis fired back at his critics via the release of a comprehensive report which addressed “actions taken by my staff” related to the $1.8 billion. The report also “refute(d) some of the assertions made by others on our handling of this matter.”
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“There is no mystery bank with $1.8 billion in it,” Loftis wrote. “There is no missing or misspent money, and all cash and investments have been properly managed and accounted for by the State Treasurer’s Office. The AlixPartners Report confirms this as well. The State Treasurer’s Office has acted in good faith to research and understand the accounting error made during the SCEIS computer conversion.”
Loftis’ report (.pdf) reiterated that the comptroller’s office is “responsible for the creation” of the state’s comprehensive annual financial report and for overseeing its enterprise accounting system – and for accurately reporting both to the treasurer. Furthermore, it reiterated that $1.6 billion of the phantom cash was “caused by the (comptroller’s) incorrectly converting non-cash to cash” within the enterprise system.
“The evidence confirms that the (comptroller)… incorrectly recorded $1.6 billion of appropriations as ‘cash,'” the report noted.
“(The treasurer) did not know, and had no way of knowing, that the comptroller general’s office had ‘created cash’ in (the enterprise system) by recording appropriations as cash,” the report stated. “Under the comptroller general’s explicit direction, (the treasurer) transferred $1.6 billion of this (money).”
Loftis also accused Gaines of having “consistently provided inaccurate communications and under-oath testimony” to lawmakers investigating the matter – while also “attempting to place undue blame on the treasurer for (his) errors.” Not only that, Loftis accused Gaines and/or his office of providing “false information” to AlixPartners during the compilation of its report and of withholding “other information” from the firm. Gaines’ office may have also “provided false information” to lawmakers, Loftis’ report alleged.
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RELATED | A SMOKING GUN
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According to the treasurer, the problem is ongoing…
“The comptroller general is obstructing (the treasurer)’s ability to follow the AlixPartners report recommendation and the directives of the General Assembly,” it claimed.
Loftis further accused one of his staunchest legislative critics – S.C. senator Stephen Goldfinch – of spreading falsehoods about the money.
“Senator Goldfinch falsely claimed to have evidence that the (missing money) held federal funds,” the report noted.
While Loftis remains very much at the center of legislative scrutiny, the release of this report – on the heels of the AlixPartners’ analysis and the smoking gun letter – has imbued him with significant momentum as he defends himself from attack. It has also resulted in renewed scrutiny of Gaines – reviving calls for lawmakers to replace him with a comptroller capable of doing his or her constitutional duty.
Both the treasurer and comptroller general are independently elected statewide offices – and both will be on the ballot in 2026.
Count on this media outlet to keep tabs on the latest developments in this saga, the upcoming political races for these offices and the status of the ongoing federal inquiry into the Palmetto State’s multi-billion dollar accounting issues.
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THE REPORT…
(S.C. Treasurer’s Office)
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ABOUT THE AUTHOR…
Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina. He lives in the Midlands region of the state with his wife and eight children.
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5 comments
So, we think we know the $1.8 billion was “fictional”
and
We think we know it was purely an accounting error caused by the differing and arcane accounting methods used by the state and our universities (that’s new) (and ever heard of GAAP?)
and
Current and former “gubamint officiators” are now arguing over who lied and who’s fuller of shite than a Christmas goose.
Sounds like a normal day in the gubernoring of South Carolina.
Seriously, hire a couple of good accountants and let’s settle this thing.
I saw some of this hearing on TV. Senator Grooms is not a smart man. He kept yelling about liars, and accused Loftis of TREASON . What an idiot. By the end of it Senator Grooms was crouched in his chair like he had the flue and Loftis got up, grabbed his suitcase and stole out like a colossus. It is damn good fun to see the Senate step in shit and get called out for it.
If ever there was a cock up it is this. The committee’s line of reasoning is tortuous and the head guy Grooms is unhinged. We need to DOGE this committee.
Isn’t Senator Steven Goldfinch the guy that was indicted for selling baby parts over state line? And the guy being sued in SC for trying to swindle a Treasure hunter?
How does he have a law license?
Curtis Loftis has been probably THE most consistently honorable and honest elected official this state has, for years. Those trying to take him down bear close watching. They should not be trusted.