No one checked if SC's election agency could repay a $30.8M loan
Summary
South Carolina's Treasurer's Office arranged $30.8 million in financing for the State Election Commission's new voting machines -- and, by its own admission, never checked whether the commission could actually make the payments. When the legislature moved the SEC's funding four months past the loan's first due date, the state came within a loan modification of a penalty clause state investigators calculated could compound at an effective 213.84% a year.
Two notes, $30.8 million, zero verification
The financing came in two notes: $28,846,199 issued in September 2024, and a second $2,017,930.92 note in January 2025 to cover sales tax the original invoice had missed. The STO told investigators it relied in good faith on the 's own representations about its ability to pay, rather than independently verifying the 's fund balances -- despite the STO's role as the 's fiduciary treasurer, which auditors say gave it ready access to check exactly that.
View data as table
| First note (Sept. 2024) | 28,846,199 |
|---|---|
| Second note (Jan. 2025) | 2,017,931 |
A payment due five months before the money arrived
The 's first combined loan payment, $10,970,754.17, came due September 30, 2025. But the legislature's FY2025-26 Appropriation Act directed the STO to disburse the 's matching $10,970,755 voting-system appropriation on February 20, 2026 -- nearly five months later. The simply didn't have the cash. Treasurer Curtis Loftis later told the 's board he hadn't been informed the legislature had shifted that appropriation's timing at all.
A penalty clause that compounds like a payday loan
The STO-negotiated financing terms included a 10%-per-month late fee on any payment more than 30 days overdue. State investigators calculated that if that penalty compounds month over month, it works out to an effective 213.84% annualized rate; read more conservatively, applying only to the original overdue amount each month, it's still a 120% APR. Under the compounding reading, the report's own math shows the $10.97 million payment growing to more than $16.06 million by January -- a $5.09 million increase, with further compounding still to come before the 's delayed appropriation ever arrived.
View data as table
| Payment due, Sept. 2025 | 10,970,754 |
|---|---|
| Compounded balance by Jan. 2026 (avoided) | 16,062,281 |
The modification that avoided disaster, and its real price tag
That worst case didn't happen. Once the SCOIG's investigation flagged the funding gap, the and its lender, TD Bank, negotiated a loan modification to sidestep the penalty -- at a real, incurred cost of $139,771.40 in extra interest. Auditors say basic due diligence up front could have avoided that cost entirely. The fix came with its own legal wrinkle, too: because the modified payment amount now exceeded what the legislature had specifically appropriated for the purpose, auditors say it violated a state code section under which a responsible officer "is guilty of malfeasance in office" and can be immediately suspended by the Governor pending investigation.
Meanwhile, the state earned interest on the money it borrowed
Before the STO ever paid the voting-machine vendor, it held the borrowed funds and invested them -- earning more than $117,252 in investment income for the state. Auditors also flagged the flip side of the penalty structure: TD Bank's late-payment terms gave the bank a financial incentive to make the loan in the first place, even if it knew the might not be able to make that first payment. Separately, South Carolina's State Fiscal Accountability Authority determined in January 2026 that the 's DS300 purchase itself hadn't complied with the state's procurement code -- an unrelated violation running alongside the financing failure. One fix did stick: after auditors raised the late-payment clause as a concern, the STO told investigators it had already removed that specific clause from future Master Lease Program note agreements.
The takeaway
- The state's own treasurer's office skipped a check that mattered. $30.8 million financed a purchase of the state's own voting infrastructure, and the office responsible for arranging that financing never verified the borrowing agency could actually pay it back -- despite having the access and the duty to check. It wasn't the only process failure in this purchase, but auditors single it out as the one that exposed the state to the largest financial risk.
- A four-month appropriations gap nearly triggered a payday-loan-grade penalty. The legislature moved the 's funding from September to February, and Treasurer Loftis says he was never told -- leaving a $10.97 million payment due against a penalty structure that could have compounded past $16 million.
- Avoiding disaster still cost real money, and created a new legal exposure. The rescue loan modification cost $139,771.40 that due diligence could have avoided, and auditors say it separately violated the state's own appropriations law -- while the state earned six figures in interest on the borrowed funds along the way, and later dropped the punitive late-fee clause from future loans.
This report does not conclude that any individual committed a crime -- the Inspector General's office is statutorily required to report its mismanagement findings to the Governor, but says determining whether the conduct rises to actual misconduct is beyond its authority and requires further review by law enforcement or another prosecuting authority. Treasurer Loftis's public comments, quoted from board meeting minutes included in the report, place responsibility on misrepresentations by the 's own former leadership rather than his office or the bank; this piece presents that account as reported, alongside the report's own finding that the STO's lack of independent verification was itself a documented lapse. The $5.09 million penalty-growth figure represents an exposure the state's own auditors calculated and that a loan modification ultimately avoided -- not money the state actually lost.
Sources(1) ▾
- South Carolina Office of the State Inspector General, Limited Investigation of the South Carolina Office of the State Treasurer (2026-05-13) — The full South Carolina Office of the State Inspector General (SCOIG) investigative report, requested by the state Senate Finance Committee, read directly for this piece via its extractable text layer. This piece draws specifically on Section III, 'Master Lease Program,' which examines the State Treasurer's Office's (STO) financing arrangement for the State Election Commission's () voting-machine purchase; the report's other sections (reporting-statute compliance, budgeting practices, the Unclaimed Property Program, and other expense-misallocation findings) are not covered by this piece. oig.sc.gov · original document
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When South Carolina's State Election Commission needed to buy new DS300 voting machines, its financing ran through the state's Master Lease Program (MLP) -- a system where the Treasurer's Office (STO) negotiates financing terms with a bank on the agency's behalf. A May 2026 investigation by the South Carolina Office of the State Inspector General⧉ found the STO arranged $30.8 million in financing for the 's voting machines and, by its own account to investigators, never independently checked whether the would actually have the money to pay it back.