Columbia, SC (WLTX) - The South Carolina Revenue Department says Richland County leaders must make changes to the penny tax program in 30 days, or else it will "enforce the state's tax laws."
The letter, dated Thursday, was sent to the council by Rick Reames, the head of the revenue agency.
The document outlines multiple problems the state says it's found with the penny tax program, which was passed in 2012 to fund transportation projects in the county. Among the faults auditors say they found were a failure to perform required audits and excessive public relations expenditures and administrative expenses that are prohibited by law.
The agency also claims it's found conflict of interest in the way contracts were awarded, as well as people benefiting from the program who were involved in the efforts to get the tax passed.
When some of these concerns were first raised by the agency in December, the council said it disagreed with some of the findings and conclusions of that report. Previous Coverage:Audit Claims Possible Fraud, Corruption with Penny Tax Program
The Richland County Council says they are working hard to address these problems.
"We're in the beginning stages of it," says Council Chairman Torrey Rush. "It's going to be a fluid program and we're going to have to make changes as we go along. We're going to have to revamp it and make it better. We are a couple years in and will have to asses where we are, take all of the DOR's comments in consideration and then we will make assessments as needed."
Councilman Seth Rose says he is hoping council will take another look at a few of the options he brought to the table back in January.
"I have sponsored reforms several weeks ago that address the vast majority of the issues raised in the latest Department of Revenue letter, and if it were passed by council there would be no need for the letter," Rose said. "That's the frustration I have because once I received the results of the audit, I sponsored the reforms and they have been bogged down by council and its processes."
One of those reforms includes funding the Small Local Business Enterprise (SLBE) program with money from the county's general fund, instead of from the penny program.
"I also have a motion that I sponsored at the last penny committee meeting that would address the public relations piece of the program development team's contract," says Rose. "Perhaps even take that out of the scope of the penny program all together and bring it in house."
"I think we need to look at the entire program and make decisions that we feel are in the best interest of the county," says Rush. "That's what it's all about, how do we pave roads in an efficient effective manner with the tax payer's dollars."
Reames did not say what specific actions his agency might take if nothing is done before the 30 day deadline.
Read the Full Letter from Rick Reames below: (Mobile Users Click Here)