Per CFO Magazine this week, a nice problem to have was discovered for the state of South Carolina. Money was discovered in the proverbial couch cushions. A lot of it.
"Last month, the state of South Carolina's comptroller discovered an unaccounted-for $1.8 billion in one of their many financial accounts. As findings have begun to develop, it's evident that poor financial controls, a major communication breakdown between the state's treasurer and comptroller, and sloppy bookkeeping have resulted in a mess for a state with both recent and historically substantial accounting errors.
According to reports, Brian Gaines, appointed to his position of state general comptroller in May of 2023, discovered the $1.8 billion in a 'flow-through' account. These accounts are used to allocate spending money to individual state agencies.
Rather than have unspent funds sitting in these agencies' accounts, this money is invested to create additional state revenue and made subsequently available through flow accounts when the money is to be spent. This likely means the unaccounted-for cash isn't just a lump sum of $1.8 billion, but rather a collection of funds that were either allocated and never spent, or money that belongs to other accounts.
In 2017, when the state implemented a new accounting system, they ran two sets of books for two years to ensure the systems produced the same outcomes. It was during this process that the account in question was created.
'This one account was like the catch-all account where that unaccounted cash went in but was never credited back to the proper accounts,' said state Senator Larry Grooms, R-Berkeley, in a statement, who is overseeing a Senate Finance subcommittee investigating the accounting error.
According to Gaines, the lack of information about the money is the issue — not the cash or account itself.
'The existence of the fund is not the issue,' said Gaines to local media. 'The fund is designated as a non-reportable pass-through fund that should always maintain a $0 balance.'"
Oops. But, a very good oops rather than owing $1.8 billion. The state should also be happy that it is just a sloppy accounting job, not a nefarious one. The story is also the size of the fund, which I am sure is not inconsequential to the state's annual budget. So, after the embarrassment and finger pointing subsides, I am sure the politicians will stumble over themselves on what to do with the windfall.
It does make you want to look for accounts you forgot about. By the way, most states have funds of forgotten and unclaimed bank accounts or settlements. You should look into state funds where you lived to see if you forgot anything.
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