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COLUMBIA – (WACH) A long-awaited Legislative Audit Council report released Tuesday concludes the state’s unemployment agency did nothing to head off the need to borrow more than $700 million to keep job benefits flowing. 

The investigation alleges ESC leaders oversaw the state’s jobless benefits fund go from a $782 million surplus in 2000 to a $723 million current deficit.  The investigation also reveals the agency improperly paid more than $171 million in state unemployment benefits during the past three years to employees who were terminated for misconduct, illegal acts or other offenses.

The report says the Employment Security Commission was losing $2 million a week as early as 2001, due to what it describes as mismanagement.

On Tuesday, Samuel R. Foster, Interim Executive Director of the S.C. Employment Security Commission held a press conference addressing the findings in the audit.

Foster said the recession and the lack of sustainable job growth in South Carolina played major roles contributing to state budget shortfalls, the Unemployment Insurance Trust Fund depletion and the state’s high unemployment.

"South Carolina is currently experienceing the highest level of unemployment in our State since the Great Dpression," said Foster.

Foster said he appreciated the efforts of the Legislative Audit Council and wished to thank them for the input they have provided.

After the conference, House Speaker Bobby Harrell released a statement criticizing the ESC and expressing “shock” at the report’s findings he said show just how broken the ESC has become.

“We knew there were great concerns with the operations and accountability of this agency.  However, this report shows an agency in shambles.  This audit exposes a complete lack of accountability, transparency and an all-in-all failure by the Commission to accomplish basic goals,” said Harrell.

Harrell said since July of 2000, the ESC was losing $400,000 per day. The loss went unreported in spite of at least two state laws requiring notification of the Legislature.

“Hopefully this exposing of how severely broken this agency has become will open the eyes of all lawmakers to the need for major reforms at the ESC.  This is one of the reasons why our state’s unemployment rate is far too high; an employment agency in disarray has done little to combat joblessness,” said Harrell.