S.C. treasurer announces refinancing $508M in public debt saved taxpayers $48 million

COLUMBIA — South Carolina Treasurer Curtis Loftis said Monday putting his office in charge of audit findings could save the state money and fix problems before they become a crisis.


The Republican treasurer also announced his office has refinanced $508 million worth of public debt, saving taxpayers about $48 million.

Loftis told The Associated Press that too many audits of state agencies are put on a shelf without proper review, and someone needs to be responsible for following through on problems and recommendations.

The House’s budget plan for 2012-13 includes a clause directing the treasurer to follow up on any audit of a state agency or public school and collect any savings.

“The problem we have in South Carolina is, we do lots of audits ... but there’s not one person with statutory responsibility or authority to follow up on it,” he said. “There’s audit after audit after audit. I could take you to a room with stacks of them nobody’s looked at.

Senate Majority Leader Harvey Peeler, R-Gaffney, called it a good, commonsense idea. He said all legislators focus on certain issues.

“But another set of eyes won’t hurt,” he said.

The Legislative Audit Council reviews agencies and programs at legislators’ request. An audit must be requested either by the House speaker or Senate president pro tem, or by at least five other legislators.

While the LAC makes recommendations, Loftis notes it can’t force agencies to do anything. The proposal also references audit findings of the State Auditor’s Office and any other independent audit.

“You can’t expect part-time people in the General Assembly to sit around in October reading these audits on the weekend. That’s the executive branch’s job,” Loftis said, referring to the Legislature’s January-to-June session.

A follow-up could include making sure legislative leaders and the governor know about a problem, going to the media if they don’t respond, working with law enforcement or working with staff on better training.

“A lot of these issues are mundane, but the impact will be tremendous,” Loftis said.

The duty will probably eventually require more staff, but not in the first year, he said.

Gov. Nikki Haley vetoed a similar budget clause last year, saying granting such authority to the treasurer’s office is unnecessary.

She also disputed a sentence that allowed the treasurer to file lawsuits on the state’s behalf, saying existing law gives that authority solely to the attorney general. The new proposal says the treasurer’s efforts to recoup money could include legal action when approved by the attorney general, in conjunction with that office.

Haley’s office declined to weigh in Monday, saying the governor will consider the idea when the final budget proposal reaches her desk.

The Senate is in the process of tweaking the House’s spending plan. Senate floor debate on the budget will be next month.

Also on Monday, Loftis announced that the state is refinancing $220 million worth of general borrowing by state agencies, colleges and schools; and $288 million in borrowing for road construction through the State Infrastructure Bank.

Loftis said his office took advantage of low interest rates during its normal review of the state’s debt portfolio, and the savings can be invested in other worthwhile projects without raising taxes.

The interest rates on the nine bonds had ranged from 4.1 percent to 5 percent. Refinanced, they range from 1.4 percent to 3.9 percent. Their term lengths didn’t change. They will be paid off in between four and 21-1/2 years, according to Loftis’ office.

Last year, Loftis announced $24 million of savings through refinancing.

The good rates are possible because of South Carolina’s AAA credit rating.

Earlier this month, two credit rating firms – Moody’s and Fitch – reaffirmed the highest credit rating for the state, while Standard and Poor’s rating of South Carolina remained AA-plus.