Columbia, SC (WLTX) - The South Carolina Department of Revenue will withhold its next payment of penny tax money to Richland County, over its continued concerns about how the funds are being spent by the county.
Revenue Department Director Rick Reames sent the letter to the council this week, Richland County Council Chairman Torrey Rush confirmed late Wednesday afternoon.
Voters approved the penny tax in 2012 to fund transportation projects throughout the county.
The revenue department collects the money raised by the tax and gives it back to the county once every three months. The next scheduled payment is set for July, but the agency says it will not give the county that money until it comes into compliance.
Last December, an audit conducted by the revenue department found what investigators felt were multiple problems with how the money was spent, and possible corruption and fraud. 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.
In late February, Reames sent a letter to the county giving them 30 days to make changes to the way the money is doled out, or face some sort of sanction by the revenue agency. While there have been exchanges between the revenue department and the county since then, no firm agreement on a course of action was reached, and Reames says the county's proposals don't go far enough.
"Council has had adequate time and opportunity to enact reform, yet Council has not acted to implement a common uniform standard to ensure appropriate expenditures of Penny Tax funds as recommended by the Department," Reams wrote.
Reames said his agency still intends to work with the council to make sure it gets in compliance. He also said that if emergency funding for the COMET bus program is needed, the state will work with the county to get that money so the service can keep running.
Rush said the revenue department's letter will be discussed in executive session during the county council's next meeting.
Read the full letter from Reames below: