Towns failing to file audits could lose incorporation under new bill

HORRY COUNTY, S.C. (WPDE) - Holding South Carolina cities and towns accountable. That's the goal of pending legislation in the South Carolina House of Representatives.

Several local lawmakers sponsored bill H-4031, which lays out consequences for towns failing to submit financial audits each year. Under the proposal, state payments must be suspended for municipalities that do not submit audits within 13 months of the end of the audit year. It also gives the Secretary of State the power to cancel a municipality's incorporation if those audits are not filed.

"Those municipalities that are following the rules have no problems with this law," explained State Representative Stephen Goldfinch.

There are hundreds of incorporated cities and towns in South Carolina and the vast majority of them fulfill what the state requires when comes reporting their finances, but a few do not. After receiving complaints about them, Goldfinch and others looked into the issue.

"Just for an example, one municipality in Charleston County right now was loaned a quarter of a million dollars for their fire district and they just so happen not to do their audit the last year and the money's gone. Nobody knows where it is. Nobody knows what happened to it and there's nothing on the record to prove otherwise," said Goldfinch.

According to the State Treasurer's Office there are 30 municipalities that are behind in submitting their audits.

The biggest offender is the town of Atlantic Beach. Town leaders haven't submitted an audit since the 2007 fiscal year.

"We give municipalities in the local match and if the taxpayers are going to place their trust in municipalities with taxpayer dollars, we need to hold them accountable," added Goldfinch.

State Representative Nelson Hardwick, who also sponsored the bill, wants to see an end to dysfunctional communities. "We are trying to encourage them to do something they are legally required to do," he said.

When asked if they were targeting Atlantic Beach, Hardwick said, "If the shoe fits, put it on." He says they want to make sure municipalities are being fiscally responsible.

According to Goldfinch, the bill has a lot of support.

"The municipalities that are at issue here have already taken note of what's happening. They see the writing on the wall. I hope it persuades them to get in compliance," Goldfinch added.

WPDE NewsChannel 15 reached out to the mayor of Atlantic Beach but our call was not returned.

Other towns in our area that are behind in submitting their audits are Timmonsville, Clio, Olanta, McColl, Sellers and Andrews.