
$1.6 Billion Accounting Error Rocks South Carolina State Treasury
COLUMBIA, S.C. — An accounting error dating back years has revealed a financial mystery that has confounded South Carolina’s government and led to significant fallout in the state’s treasury office. In a 65-page report released by AlixPartners, a New York-based global consulting firm, it was disclosed that $1.6 billion of a previously reported $1.8 billion “cash balance” did not exist. The error has raised questions about the state’s financial oversight and accountability.
Interestingly side-note, South Carolina Assistant Attorney General, Creighton Waters, the lead prosecutor in the Alex Murdaugh trial critiqued the defense for relying on out-of-state experts. But the state of South Carolina went to a New York-based accounting firm to fix its mess. During his arguments, he suggested that bringing in such experts was a weak strategy. He implied that these experts were being paid to support the defense’s narrative, potentially making their testimony appear less credible to the jury. Does Waters’ theory on using an out-of-state expert stand in this situation? Did the state of South Carolina pay AlixPartners to support their narrative? Probably not, but it is ironic if anything.
In the Murdaugh trial, Waters aimed to contrast the defense’s strategy with the state’s reliance on local and state law enforcement agencies and in-state forensic experts. This was likely part of his effort to appeal to the jury’s sense of trust in local authorities and skepticism toward outsiders being brought in for paid testimony.
How It Began
The issue dates back to a transition in South Carolina’s accounting systems in the mid-2000s, when the state adopted a new financial management platform to streamline its processes. During this transition, an incorrect recording was made in the system’s bank fund, reflecting $1.6 billion that was never actually deposited. Over time, the discrepancy was compounded, unnoticed, or unreported by subsequent audits and financial reconciliations.
While the error was discovered internally around 2018, it was not disclosed to the public or lawmakers until late 2024, sparking outrage and demands for accountability.

What the Report Revealed
AlixPartners’ investigation, commissioned by state lawmakers, found that approximately $1.6 billion was erroneously recorded as cash. The remaining $200 million of the reported $1.8 billion balance was real and properly allocated to the General Fund, according to the report.
“This was not a case of fraud or theft but a significant oversight rooted in a lack of proper financial controls during a system transition,” the report stated.
However, the report also criticized the lack of transparency and accountability within the State Treasurer’s Office (STO), calling for stronger oversight measures and independent audits to prevent future errors.
Political Fallout
The discovery has placed State Treasurer Curtis Loftis at the center of the controversy. Loftis, who has held the position since 2010, has faced harsh criticism from both lawmakers and the public for the handling of the situation. Some legislators have called for his resignation or impeachment, arguing that the issue reflects systemic failures under his leadership.
Governor Henry McMaster has defended Loftis and other officials, framing the error as “human mistake” rather than intentional wrongdoing. “This was a complex situation exacerbated by outdated systems and practices,” McMaster said at a press conference. “We need to learn from this, not punish those who have served diligently.”
Despite the governor’s support, pressure has mounted for Loftis to step down. In response, Loftis has emphasized that his office inherited the flawed accounting records and that his team worked to uncover and address the issue. “Transparency has been my priority since day one,” Loftis said. “This error is a legacy issue that we’ve worked tirelessly to resolve.”

Who Was Held Accountable?
While Loftis remains in office, the fallout has led to the firing of several employees in the State Treasurer’s Office, including the former deputy treasurer and a senior financial analyst who oversaw the reconciliation process during the transition. Additionally, the state’s independent auditing firm faced scrutiny for failing to detect the discrepancy during annual reviews.
In the legislature, bipartisan calls for reform have emerged. Lawmakers have proposed creating an independent auditing body to oversee the state’s financial records and ensure compliance with best practices. “This is about restoring trust in our institutions,” said State Senator Katrina Shealy. “South Carolinians deserve better oversight of their tax dollars.”
What Happens Next?
The report’s release has triggered several actions:
- Legislative Hearings: State lawmakers have scheduled hearings to investigate the error and identify gaps in financial oversight.
- Policy Reforms: Proposals to strengthen transparency and accountability in the STO are expected to move forward in the upcoming legislative session.
- Independent Audits: The report recommended hiring independent auditors to conduct regular reviews of the state’s financial systems.
South Carolina’s financial management will likely remain under scrutiny for years as reforms take shape. Meanwhile, questions about how the error went undetected for so long continue to fuel public frustration.
The Bigger Picture
This accounting error underscores the challenges many states face in managing large-scale transitions to modern financial systems. South Carolina’s experience serves as a cautionary tale about the importance of transparency, thorough oversight, and continuous auditing in public finance.
As South Carolina works to rebuild public trust, officials and lawmakers hope this crisis will lead to lasting reforms that ensure accountability for generations to come.
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