Bookkeeping worries Eckstrom

The state Employment Security Commission's questionable accounting practices could put South Carolina's ability to borrow federal money -- and cut checks to the nearly 12 percent of unemployed workers -- in jeopardy, state chief accountant Richard Eckstrom said Wednesday.

Eckstrom, the comptroller general, said federal officials and White House personnel left him with one important takeaway message from meetings he had with them earlier this week.

"We had better carefully protect and carefully account for the federal money that is being sent to South Carolina, and if we don't, we jeopardize our ability to receive federal funds," Eckstrom said. "That is a pretty frightening thought."

Eckstrom was in Washington to discuss the oversight of federal stimulus cash across the country. The commission is distributing about $15 million a week in unemployment benefits, which includes stimulus money for extended benefits and federal loans.

The state is projected to borrow $1 billion to cover benefits as the state's unemployment remains among the highest in the nation at 11.6 percent. The trust fund that cuts the checks has been broke since last year.

Commissioner Becky Richardson, one of three people appointed to oversee operations, said the unemployment agency faces a major overhaul.

"I am ready and willing to help them bring about reform to make this a more efficient agency," Richardson said.

"South Carolina deserves better than what it has received. We all need to roll up our sleeves and fix it."

Eckstrom said an ongoing annual audit of the commission shows "significant" discrepancies between bank statements and balance sheets. He likened it to a personal checkbook register and bank statements showing different totals in an account. Eckstrom said he was not at liberty to say at this time how much money is in question, but the audit report will be public when it is complete.

The bank statements and the balance sheets need to be crossed-checked monthly, Eckstrom said. The commission went a year without checking, he said.

One issue perhaps contributing to the problem was that the commission did not have a certified accountant in charge of cross-checking the balances, Eckstrom said.

"The problem with the agency is typical in state government and that is, it thinks it can do accounting with unqualified people," Eckstrom said.

Richardson said new staff has been hired to address that problem, including a certified accountant. She said the change was made as soon as the commissioners became aware a problem existed.

More changes at the commission are also under way. Executive Director Roosevelt Halley recently retired and the commission is searching for a replacement, she said. Sam Foster, a former commissioner, is interim director.

Additionally, the Legislative Audit Council is studying the commission and will present recommended changes to lawmakers. When they return to session in January, lawmakers are expected to consider giving the commission a head-to-toe makeover.