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I was reading FITSNews one evening about a year ago, not long after writing a check to the state, not a small one, when I saw a headline about South Carolina losing $3.5 billion in a financial restatement. I assumed it was a typo. I went back and read it again. It wasn’t.
That was stunning enough. Then I found out it wasn’t even the whole story. Investigators had also uncovered questions surrounding a separate $1.8 billion tied to conversion and accounting entries during the state’s transition from its legacy STARS accounting system to the current SCEIS platform. Two massive accounting failures. Billions of dollars. And most South Carolinians had no idea either had happened.
I spent the next month trying to understand what was going on. What I found, or rather what I couldn’t find, changed everything. There are bits and pieces of financial information scattered across state government, but nothing comprehensive, nothing current, and no meaningful public tracking of whether the spending is producing results. I couldn’t find a clear picture of where the money goes. I’m not sure anyone can.
That is why I am running for Comptroller General.
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Lawmakers in Columbia want to eliminate the income tax. I support that goal. Families should keep more of what they earn, and a disciplined government should always aim to reduce the burden on its citizens. Every dollar taken from families and businesses is a dollar that isn’t being invested, hired, or grown. And unlike the corporate incentive giveaways that have become our substitute for a competitive tax code, broad tax relief doesn’t pick winners. It lets everyone compete on a level playing field. If we want to recruit businesses the way Tennessee, Florida, and Texas do, we need a tax code that competes, not a system of handouts that rewards whoever hires the best lobbyist.
But before South Carolina eliminates the income tax, lawmakers and taxpayers deserve a clear answer to a basic question.
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WHERE IS ALL THE MONEY GOING?
South Carolina manages more than $40 billion a year in taxpayer funds. I have spoken with legislators and business leaders across the state, and the consensus is striking. The big errors are almost certainly not the only errors. When billions of dollars can remain misclassified or misunderstood inside the state’s financial reporting process for years, it is a strong indication of poor management and an understaffed office operating without adequate oversight. Large accounting failures rarely occur in isolation. They reveal deeper weaknesses in internal controls, reconciliation processes, and financial discipline.
Those numbers caught headlines for obvious reasons. But those errors are not the fire. They are the smoke.
In business, no responsible CEO would make major strategic decisions without clean financial statements. No board of directors would approve major capital moves if the books were unclear. State government should meet the same standard. South Carolina manages tens of billions of taxpayer dollars each year. Before lawmakers decide which taxes to eliminate, they deserve a complete and reliable picture of how that money moves through the system.
Right now, the House and Senate are in the middle of budget season, making decisions that affect every taxpayer in this state. They are debating spending priorities, evaluating tax reform proposals, and weighing choices that will shape South Carolina’s future. Legislators take this work seriously. But even the most diligent lawmaker can only make decisions based on the information available. When the numbers are unclear, every decision becomes guesswork.
A budget is nothing more than a list of priorities with dollar signs attached. Legislators cannot set those priorities responsibly unless they can clearly see where the money is going. Right now, that level of clarity does not exist.
The good news is that this problem has a solution: fix the financial systems. That work begins with three straightforward reforms.
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RELATED | SOUTH CAROLINA ‘REPUBLICANS’ FOIST $42.6 BILLION BUDGET ON TAXPAYERS
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RECONCILE THE BOOKS, IMPLEMENT A MONTHLY CLOSE
The priority must be a full reconciliation of the state’s financial records. Treasury balances, agency accounting systems, and the enterprise accounting platform must align so every dollar moving through state government can be tracked and verified.
Private companies close their books every month. South Carolina should operate with the same discipline. Today the state primarily compiles its financial picture once a year through the Annual Comprehensive Financial Report. That approach leaves lawmakers and agency leaders working with outdated information. A state managing tens of billions of taxpayer dollars should close its books monthly, providing a current and reliable view of revenues, expenditures, and cash balances.
Regular reconciliations and monthly financial closes create accountability. They force agencies to maintain clean records, allow leaders to identify problems early, and prevent small accounting errors from becoming billion-dollar surprises.
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BUILD A TAXPAYER TRANSPARENCY DASHBOARD
Citizens deserve to see how their money is spent. South Carolina should operate a public financial transparency system where taxpayers can view state expenditures in real time. Vendors, contracts, agency spending, and program costs should be easily searchable by anyone with an internet connection.
Several states already operate systems like this. Transparency changes behavior. When spending becomes visible, waste becomes harder to hide and leaders become more careful with every dollar.
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GIVE LAWMAKERS DATA TO MAKE REAL BUDGET DECISIONS
Once the financial systems become reliable and transparent, the legislature can finally answer the question that matters most: where should we cut?
Tax reform cannot happen in a vacuum. Eliminating the income tax will require thoughtful decisions about spending priorities and efficiencies. Lawmakers cannot make those decisions responsibly without accurate data. Clean books create clarity, and clarity is what allows policymakers to make bold reforms.
None of this is complicated. Every well-run organization in the private sector already operates this way. South Carolina should expect the same from its government.
I went looking for the numbers to make the case for tax reform, and they weren’t there. That is the problem I am running to fix.
My priority as Comptroller General will be straightforward: fix the books. Reconcile the accounts, build transparency into the system, and give lawmakers and citizens a clear picture of where every dollar goes.
South Carolina can eliminate the income tax. We should. But first we need to know where the money is, and right now, we don’t.
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ABOUT THE AUTHOR…
Mike Burkhold is a Republican candidate for comptroller general of South Carolina.
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3 comments
The Comptroller General is the chief accountant for the state and issues the accounting reports. Those reports have been riddled with errors for years.
The Comptroller has never given a full reporting of the $5.9 billion dollar overstatement of cash.
Why not?
What is the state hiding?
Mark, remind readers how much money in federal contracts your company has secured over the years.
“We need a tax code that competes, not a system of handouts that rewards whoever hires the best lobbyist.” Truer words have never been spoken about our state government. I really like this guy. But he is going to have to learn the same lesson that all of the last 4-5 governors have, and the folks currently running for that post: we do not have co-equal branches of government akin to the federal government. Our own state supreme court has explicitly recognized that fact in its published rulings – on several occasions. The Legislature is a 900 pound gorilla. The executive branch is at best a large mastiff – strong to a degree, but no match for the gorilla. He can certainly do something to fix the State’s books [to this day I think there is something that traces back to ol’ Sen. Leatherman and some of his pet projects that would mysteriously get funding at the agency level but you couldn’t find a line item for it in the budget – there had to be some level of slight- of- hand in the books to make that happen, and there are people still around with a motive for obscuring the truth in the aftermath.] But all this talk of eliminating the income tax, lowering taxes, funding priority projects, getting rid of corporate handouts for business recruiting – that is entirely the province of the Legislature, and no Governor, Comptroller, Treasurer, AG etc. is going to have any meaningful impact on that other than the art of moral persuasion. If you want real change, it has to happen in the legislature. All the executive branch officers are just window dressing in that regard.