BREAKING NEWS: Nearly $60 million accounting error means state budget cut
April 14, 2010
Nearly $60 million accounting error means state budget cut
By Mike Fitts
The state budget for the current and next year must be cut by almost $60 million because of an accounting error.
The state Board of Economic Advisors disclosed Wednesday that the money had erroneously been counted as part of the state’s general fund. According to a special proviso in last year’s budget, the money should have been set aside in a separate fund earmarked for numerous uses.
That means that estimates of revenue were incorrect for the current year and for next year. The state closes its books for the current year June 30, so almost $60 million in new cuts must be found with less than three months left to go. It also means a further cut to the $5 billion budget the S.C. Senate is poised to debate.
The Treasury Department maintains that the special set-aside fund for money that had been garnered through enforced collections had been created back in September. The Revenue Department did not transfer the funds until March 30, according to Deputy State Treasurer Frank Rainwater.
The Revenue Department had not been given an account number to receive the money, so the dollars were waiting in the general fund for the word from the Treasurer’s Office, according to DOR spokeswoman Adrian Fairwell.
Whatever the reason, the error means that new budget cuts must come at a time when state revenues for the current year are actually close to what was projected, BEA Chairman John S. Rainey said.
The state’s economy seems to have leveled off, Rainey said.
“We do believe we’re bumping along on the bottom,” Rainey said. The economic evidence implies that unemployment will remain stubbornly high for months to come, he said.