Audit: Upstate town owes hundreds of thousands due to water loss and more
GREENVILLE, S.C. (FOX Carolina) — The South Carolina Office of the Inspector General released a blistering 54-page report following an audit into the Town of Calhoun Falls’ financial problems.
CRI Advisors reviewed the town’s books and records for July 2019 through June 2024.
“The Town’s internal and external financial reporting notably deteriorated beginning with Mr. Holland’s tenure as mayor,” CRI Advisors’ report states, referencing Calhoun Falls Mayor Terrico Holland.
Holland took office in 2022, unseating incumbent Chris Cowan.
According to the report, the town’s financial statements have not been consistently maintained or adjusted. It also states that “lack of effective management oversight” has degraded the town’s internal controls.
The report estimates that at least $20,000 worth of town expenses were considered waste or abuse of public funds. Bills owed to vendors exceeded $600,000 while the town’s available cash was reportedly less than $300,000.
MEAL EXPENSES
“The Town has expended funds on unnecessary expenses including meals, snacks, etc,” the report says. “This has resulted in a waste of the Town’s funds. Certain Town employees also abused the lack of oversight related to the purchase of meals and snacks for their personal benefit.”
CRI identified more than $17,000 worth of meal expenses for fiscal years 2020-2024.
“When compared to the approximate 260 average working days in a year, it appears the Town is paying for certain employees’ meals every workday,” the report states.
Holland told auditors the town has recently reduced the amount of meal expenses. The report says when auditors asked why, “Mr. Holland indicated that ‘when you are broke, you do not go out to eat, you make a ham sandwich.’”
CRI states in the report, “Mr. Holland and the Town (primarily its administrative employees) did not follow this sage advice.”
INFRASTRUCTURE & UTILITIES
Degradation of the town’s infrastructure is also noted in the report.
“The Town has a significant number of malfunctioning or inoperable utility meters,” the report says. “The Town also appears to lose a significant amount of water that it purchases due to the deteriorating condition of its utility system.”
During the five-year period under review, auditors estimate the town lost $725,000 due to water leakage and water consumption that wasn’t billed to customers.
City leaders said the water system is more than 100 years old and needs to be replaced during a meeting in March.
CRI said the town received grant funds for construction projects, including water and sewer repairs and upgrades, during the review period. However, the report also states that the town lost money because it has not increased utility costs for customers since 2020.
The report says the town has historically not paid vendors on a timely basis, adding to its financial deficit.
“By not paying Dominion Energy when the bills were due, the delay in payment caused significant late fee charges totaling $88,604.17 during the review period,” the report states.
As of June 2024, Calhoun Falls owed more than $255,000 to Dominion Energy and $294,800 to Abbeville Public Utilities.
The town was sued by the city of Abbeville in March, after allegedly failing to pay for city water for months.
WHAT’S NEXT
CRI’s report says the state of the town places it at a high risk for fraud.
The report includes 26 recommendations for resolving its records and financial problems. CRI says implementing these quickly will be critical to stabilize the town.
FOX Carolina has reached out to Calhoun Falls for comment on the report. We have not yet received a response.
To read the full report, click here.
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