Horry County city behind on audits after former employee shreds records, admin says
The City of Loris hasn’t completed an annual audit for its past three fiscal years, and six months’ worth of improperly shredded documents is causing the delay.
Damon Kempski, the city’s administrator, said documents from January to June 2016 were shredded while he was on medical leave, and some of that information was not backed up electronically, making it very difficult for auditors to ensure accuracy in the city’s financial reporting.
Kempski said he doesn’t know for sure, but his understanding is that a former city employee called the shredding company and destroyed the documents. He declined to name the employee because it’s an ongoing issue, but said he or she had access to financial records and is no longer employed with the city.
Kempski’s not aware of any ongoing criminal investigation due to the improper shredding.
State law requires municipal and county governments to conduct annual audits and submit the results to the State Treasurer, who is allowed to withhold funding until the audit completed within 13 months of the end of the fiscal year.
The Treasurer’s Office posts a list on its website of municipalities delinquent on those audits, and Loris is the only one currently listed in Horry County.
Kempski said the Treasurer’s Office just contacted the city regarding the overdue audits a few weeks ago, and they’ll be withholding $15,000 from Loris per quarter until they’re completed.
That money, which will still be remitted, is used for General Fund operations, and the missing funds haven’t hindered Loris, he said.
Kempski said he’s in constant communication with the auditors, and his understanding is that the 2015-16 audit will be completed within a month. Once that one is complete, all documentation is available for the 2016-17 and 2017-18 audits, so those should be completed quickly, he said.
Loris lost many records after Tropical Storm Florence caused a roof collapse and flooded the city’s records room, but Kempski said those destroyed records won’t affect any future audits.
City operations moved out of Loris City Hall as a result of the flooding, and Kempski said city officials are still working with FEMA to determine whether the building will be repaired or city operations will need to find a new building.
