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A recent audit conducted by the South Carolina Department of Revenue (SCDOR) regarding Hampton County’s much-maligned Capital Projects Sales Tax (CPST) was released on July 16, 2024 – nearly a month ago – and quietly uploaded to the county website.
In the intervening four weeks, though, there have been no press releases or public notifications issued about the audit – nor has the county alerted citizens to it on social media.
It’s almost as if county leaders don’t want anyone to know it’s there…
As this media outlet recently reported, Hampton County is awash in scandal as “allegations of fraud, millions of dollars in missing or misspent funds and a habitual failure to report required financial information to the public” have eroded public confidence in the integrity of local leaders.
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The turmoil began in early 2022 when a citizens’ group alleged that millions of dollars tied to the county’s CPST was either missing or had been misappropriated. More questions followed in April of this year when it was announced that – for the second year in a row – Hampton County had been sanctioned by the S.C. treasurer’s office for failing to submit a required independent audit.
Additionally, there are two pending S.C. State Law Enforcement Division (SLED) inquiries tied to county finances.
The first inquiry is reportedly focused on former Hampton County administrator Rose Dobson-Elliott. In April 2023, interim county administrator Heather Simmons Jones filed a report (.pdf) with the Hampton County sheriff’s office accusing Elliott of stealing funds from the county. Elliott left the Hampton County job in December 2023 to take a position in Jasper County as the director of engineering services.
The second investigation followed a request from newly elected sheriff Anthony ‘Bubba’ Russell – who asked SLED to review discrepancies between the sheriff’s office’s purchase orders and its equipment inventory.
(Click to view)
In response to the ongoing investigations and allegations of missing funds, the S.C. Senate backed the idea of a forensic audit of the troubled county as part of its annual budget process. The state budget – which was signed into law by S.C. governor Henry McMaster earlier this month – included a requirement for the state’s auditor and inspector general to hire an outside firm to audit the county as well as its school district.
That audit is separate from the one conducted by SCDOR.
How did we get here? In 2012, Hampton County voters approved a referendum imposing a new one percent local sales and use tax for a period of eight years – beginning on May 1, 2013 and continuing through June 30, 2021. A total of $11.21 million was collected by the county and, per state law, was supposed to be devoted towards capital projects such as roads, bridges, public facilities, recreation facilities and water and sewer projects.
There were twelve projects listed when Hampton County voters approved the referendum. According to the audit, only six of those projects have been completed.
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The following findings were listed in the audit report:
- Between August 2013 and June 2021, Hampton County borrowed a total of $13,250,000 from the CPST to subsidize its general fund. CPST revenues should have only been used for the capital projects listed in the referendum – and debt service on bonds. Although the county has reimbursed $10,000,000, a remaining $3,250,000 is still outstanding.
- A duplicate reversal for a deposit error in the amount of $363,685.19 also needs to be repaid to the CPST account. A deposit error to the CPST account occurred on July 21, 2015. It was corrected on July 13, 2016 as part of a withdrawal in the amount of $906,620.52 – and again on August 5, 2016 as part of a withdrawal in the amount of $829,423.24.
- Supporting documentation for withdrawals from the CPST bank account – and an audit sample of invoices from the CPST general ledger – were requested. Despite the request, Hampton County failed to provide all the requested information. Specifically, Hampton County was unable to provide supporting documentation for several transactions from the bank account.
- The 2012 referendum required the CPST projects to be funded in priority order. Despite this requirement, project number five (a library renovation) was completed – while project number four (a new recreation complex) was not started. Also, project number nine was started prior to four previously enumerated projects.
- Hampton County did not submit required quarterly reports to the Department for the CPST program. According to S.C. Code Section 4-10-360, “within thirty days of the receipt of any quarterly payment, the county treasurer or the county administrator shall certify to the Department of Revenue amounts of net proceeds applied to the costs of each project and the amount of project costs remaining to be paid and, if bonds have been issued that were approved in the referendum, a schedule of payments remaining due on the bonds that are payable from the net proceeds of the sales tax authorized in the referendum.”
All told, the report found Hampton County was not in compliance with the Capital Sales Tax Act approved by voters and must reimburse the CPST fund in the amount of $3,613,685.19.
FITSNews recently spent some time in Hampton County speaking to community leaders, elected officials – and most importantly to the citizens who are seeking answers as to how the county ended up in such dire financial straits. We published the first report from our visit earlier this week.
Be on the lookout for additional reports in the near future as we seek to get to the bottom of the missing money on behalf of the citizens and taxpayers of Hampton County.
Anyone with information related to this story is encouraged to email research@fitsnews.com.
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RECOMMENDATIONS…
Additionally, the audit provided recommendations to Hampton County for future capital sales tax programs. The recommendations were similar to those made in a recent audit completed on the county’s 2023 budget. To increase transparency and aid in understanding when and how the funds will be used, it is recommended that the county “request timely withdrawals from the CPST account for the exact amount needed to cover current invoices.”
Given the failure to provide supporting documentation for a number of transactions, the audit also recommended establishing a records retention policy for CPST program documentation as well as formal documentation of accounting policies and procedures to create an internal control framework and ensure accountability and consistency in daily transactions and financial reporting.
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THE REPORT…
(SCDOR)
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ABOUT THE AUTHOR …
Jenn Wood is FITSNews’ incomparable research director. She’s also the producer of the FITSFiles and Cheer Incorporated podcasts and leading expert on all things Murdaugh/ South Carolina justice. A former private investigator with a criminal justice degree, evildoers beware, Jenn Wood is far from your average journalist! A deep dive researcher with a passion for truth and a heart for victims, this mom of two is pretty much a superhero in FITSNews country. Did we mention she’s married to a rocket scientist? (Lucky guy!) Got a story idea or a tip for Jenn? Email her at jenn@fitsnews.com.
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2 comments
Don’t elect democrats.
Someone needs to audit Beaufort County next.