The state treasurer's office plans to withhold more than $100,000 from the town of Andrews and $15,000 from Atlantic Beach over the course of the year because neither town has turned in its state-mandated audit.
The two towns were among 21 the state treasurer's office announced this week it would target under a new state law that went into effect Sunday. More than half of the towns on the list have fewer than 1,000 people, including Atlantic Beach.
Andrews, with a census count of about 3,000 residents, is second-largest behind Fairfax.
"We do not have Andrews' or Atlantic Beach's [audits], and nor has anyone called us to say they were coming," said treasurer's office spokesman Scott Malyerck.
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The money specifically being withheld is known as the "Aid to Subdivisions," appropriated by the state on a population-based formula and paid every three months, Malyerck said. The next quarterly payment, scheduled to go out in April, would have sent $23,433 to Andrews and $2,680 to Atlantic Beach, Malyerck said.
The town's share of accomodation taxes collected by the state will also be withheld, Malyerck said. Those figures have not yet been calculated, but he said last quarter's accomodations-tax payment to Andrews was $808 and $1,031 to Atlantic Beach.
Neither town has turned in audits for the past three years, Malyerck said. In order to qualify for the money again, the towns must turn in their most-recent audit, Malyerck said, meaning they could theoretically turn in only the audit from 2007.
The move is intended to create more accountability and transparency in local governments, Malyerck said, and has already had an effect. One of the 21 towns named by the treasurer's office, the Clarendon County town of Summerton, turned in its overdue audit Tuesday.
While the audits can be expensive, he said the Municipal Association of South Carolina has helped some small towns pay for them and that the state has a rebate available.
"There's help if a town really wants it," Malyerck said. "For a small town, it doesn't cost a lot - if they've kept up their financial statements."
Atlantic Beach interim Town Manager Kenneth McIver said at a town meeting Monday that he wanted to seek the Municipal Association's help paying for the audits so the state money will not be lost.
"We're losing money by not having completed our audits and our financial statements," McIver said at the meeting, though he did not return a call for comment Tuesday. "We will be getting the audits done."
Officials at the Municipal Association said they were discussing ways to help Atlantic Beach.
The association supported the law when it was passed last year, said deputy executive director Reba Campbell, who noted that 93 percent of the towns and cities in the state filed audits on time.
Officials in Andrews did not return a call for comment.