News Summary
George Kennedy has stepped down as South Carolina’s State Auditor, following a major accounting scandal involving a $3.5 billion error. His resignation raises questions about the state’s financial oversight and accountability. Kennedy’s departure signals a shift in the state’s approach towards financial management, as the Office of the State Auditor seeks improvements and greater independence amid scrutiny from lawmakers and federal agencies.
Major Shift in South Carolina: State Auditor George Kennedy Resigns Amid Accounting Scandal
Columbia, South Carolina is buzzing with news after State Auditor George Kennedy has stepped down from his position effective immediately. This surprising resignation comes on the heels of a major accounting scandal that has had state finances under the microscope. Kennedy, who took on the role in October 2015, made the decision to resign for what he believes are the best interests of the Office of the State Auditor.
What’s the Big Deal?
For many, the State Auditor’s role may seem like just another bureaucratic position, but it actually holds a lot of responsibility. The State Auditor conducts financial and compliance audits of various state agencies as well as healthcare providers receiving Medicaid funds. Unfortunately, Kennedy’s tenure has been overshadowed by significant issues in the state’s financial reporting.
The $3.5 Billion Blunder
Everything began to unravel following a shocking $3.5 billion accounting error discovered in the Comptroller General’s office. This blunder raised serious questions about the state’s financial health and led to closer inspections of accounting practices throughout the state. You heard that right – $3.5 billion! That’s a number that can definitely turn some heads and raise eyebrows.
Back in 2017, Kennedy had already recommended a full reconciliation of state accounts, but it wasn’t until spring 2022 that this crucial task was performed. Fast forward to 2023, an independent audit revealed another shocking revelation: a discrepancy of $1.8 billion linked to an accounting mistake from a decade ago. This came about as changes were made to the state’s financial system.
Are Those Millions Really There?
The audit, conducted by a DC-based consulting firm called AlixPartners, highlighted that most of the supposed surplus — the $1.8 billion — simply does not exist. That’s a tough pill to swallow for tax-payers who rely on transparency and accuracy from their state officials. To make matters worse, it turns out that key financial figures, including the State Treasurer and the former Comptroller General, were aware of these errors for years before they finally reached the lawmakers in late 2022.
A Ripple Effect
The fallout from these financial blunders has been significant. Former Comptroller General Richard Eckstrom resigned in 2023 as scrutiny increased for the management of state funds. Additionally, State Rep. Heather Bauer has taken the issue further by filing a bill to kickstart impeachment proceedings against State Treasurer Curtis Loftis. With tensions high and investigations ongoing, the state’s financial practices are now under the watchful eye of the U.S. Securities and Exchange Commission.
Plans for the Future
As Kennedy exits the stage, he’s expressed a desire to help ensure a smooth transition at the Office of the State Auditor and has shared thoughts on how to strengthen the office moving forward. For context, Kennedy had an annual salary of $187,200 while in office, a sizable sum for public service. The auditor’s office does report to the State Fiscal Accountability Authority, a group that includes some key financial officials in the state.
What’s Next?
Recommendations from AlixPartners indicated a need for changes within the structure of the auditor’s office. Lawmakers have raised important concerns about the potential for conflicts of interest that arise from the current reporting structure. They want to see more independence for the auditor’s office, separate from the treasurer and comptroller general.
To many, Kennedy’s resignation was not completely unexpected given the climate surrounding state finances and the prior awareness of persistent accounting problems. As everyone waits to see who will take the reins next, the hope is that substantial changes will come to enhance the reliability of South Carolina’s financial oversight.
Deeper Dive: News & Info About This Topic
HERE Resources
Additional Resources
- WIS TV
- Wikipedia: South Carolina State Auditor
- Live 5 News
- Google Search: South Carolina auditor resignation
- The State
- Encyclopedia Britannica: Auditor
- WACH
- Google News: South Carolina State Auditor George Kennedy
Author: STAFF HERE LEXINGTON WRITER
The LEXINGTON STAFF WRITER represents the experienced team at HERELexington.com, your go-to source for actionable local news and information in Lexington, Fayette County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Woodland Art Fair, Crave Food and Music Festival, and Railbird Festival. Our coverage extends to key organizations like Commerce Lexington and Blue Grass Community Foundation, plus leading businesses in education, manufacturing, and technology that power the local economy such as University of Kentucky, Toyota Motor Manufacturing, and Lexmark. As part of the broader HERE network, including HEREBowlingGreen.com and HERELouisville.com, we provide comprehensive, credible insights into Kentucky's dynamic landscape.
