After years of waiting, the audit that covers the City of Loris finances from Jan. 1, 2016 – June 2016 has been released -- but with an asterisk.
The audit was conducted by the accounting firm of Mauldin and Jenkins. And, although they presented their report during a meeting May 22, they told Loris City Council they could not verify the authenticity of the findings because of most of the documents they needed had been shredded.
“Due to the destruction of accounting records and turnover in financial management personnel, we were unable to obtain accounting records which support the balance included in the financial statements as of, and for, the 18-month period ended June 30, 2016,” a narrative in the audit states.
The missing documents the auditors needed to do a proper accounting of the city’s finances include cash, receivables, revenue, accrued liabilities, inventory, prepaid items, capital assets, long-term debt, expenses/expenditures and interfund balances.
“Therefore, we were unable to apply the necessary auditing procedures related to these amounts,” the document states.
Still a mystery
The question of why the needed financial documents were shredded before an audit took place, and why there was not a backup of the paperwork before the destruction is one that has never been answered.
Loris Administrator Damon Kempski says he did not authorize the shredding of any documents. He said he was out of work on sick leave when it took place.
More than a ton of paperwork was destroyed by Shredright Corp. in the fall of 2016.
The paperwork destroyed covered the period from January – June 2016.
After the auditors made their presentation, reporters asked Kempski and Loris City Council who is responsible for the shredding. It is a question they have asked many times. Once again, no one had a definitive answer.
Kempski said when former City Clerk Martha Dorman retired at the end of 2015, “the records were accurate and true.”
Later in the meeting, Kempski said the person “would lose a job” over the shredding no longer works for the city but, when asked, he would not say that person’s name.
“This has been played out in the press for quite some time. Everybody is aware of who is responsible,” he said.
Council was also asked why no criminal charges have been pursued for the destruction of city property.
“That will be a criminal question council cannot answer,” Kempski responded. He also said it would not be investigated by the Loris Police Department “because it is a local matter.”
The Loris Scene contacted the South Carolina Law Enforcement Division to see if that agency is investigating.
SLED spokesman Thom Berry said that agency has not been asked to investigate.
The audit that was presented will be sent to the state.
Kempski said now the city will be able to complete the remaining delinquent audits “rather quickly” which should free up the funds the state has been withholding from the city.
As a penalty for the delinquent audits, the state has been withholding $15,000 per quarter that the city should have been receiving.
Kempski said it is the goal to have the audits caught up within the next six months.