SC Treasurer charged $257K in crisis PR to its investment fund
Summary
South Carolina's Investment Management fund exists to cover the actual cost of managing the state's investments -- and by state proviso, the fees charged against it can't exceed that actual cost. A May 2026 State Inspector General report found the Treasurer's Office instead used it to pay for crisis-communications services, recruiting fees for employees who had nothing to do with investments, and consulting fees tied to a separate forensic review of the office's own finances -- $257,394 in charges investigators say have no discernible connection to the fund that paid them.
Four vendor invoices, one fund, no clear connection
SCOIG traced the $257,394 to four specific charges, each billed entirely to Investment Management. Infinity Marketing's $72,258 invoice was for "Crisis Communication" services. A University of Southern California professor billed $19,680 -- 26.24 hours at $750 an hour -- for work tied to a separate forensic accounting review of the STO's finances by the firm AlixPartners. And consulting firm Protiviti Government Services contributed two more pieces: $37,856 for a "Subject Matter Expert II" who turned out to be a former STO employee working on that same AlixPartners review, and $127,600 in fees to recruit six named STO employees -- none of whom, SCOIG found, were actually assigned to the Investment function footing the bill.
View data as table
| Protiviti recruitment fees (6 employees) | 127,600 |
|---|---|
| Infinity Marketing crisis communications | 72,258 |
| Protiviti "Subject Matter Expert II" | 37,856 |
| USC professor, forensic-review work | 19,680 |
Paying to manage the fallout, from the fund meant for something else
The pattern connecting two of the four charges is hard to miss: both the USC professor and Protiviti's "Subject Matter Expert" were working on AlixPartners' forensic review of the STO -- a separate accountability exercise -- yet their combined $57,536 in fees landed on the same fund that's supposed to cover investment management. Protiviti's business analyst fee, $55,797, sat alongside the recruitment fees on the same invoices; SCOIG didn't include it in the $257,394 finding because the STO's records didn't explain what work the analyst actually performed -- a gap of its own, just not one investigators could quantify.
No documented rule for how any of this gets split
The misallocated vendor fees aren't an isolated glitch -- they sit on top of an agency-wide gap. SCOIG found the STO has no formal, written cost allocation plan explaining how it divides salaries and operating costs among its various functions. Of 77 STO employees in an October 2025 staffing report, 57 had their pay split across two or more functions with no documented basis for the specific percentages used; the other 20, including the State Treasurer himself, had their full cost charged to just one.
View data as table
| Costs split across 2+ functions | 57 |
|---|---|
| Costs charged to one function | 20 |
A budget built to spend to zero, and a fee fund that overshot
Two more findings round out the picture of an accounting system SCOIG says can't reliably show where money actually went. The STO's own internal procedures direct staff, at year's end, to move expenses around specifically to "clear" its general fund appropriation down to zero -- a practice SCOIG determined amounts to reclassifying properly-recorded Other Funds expenses into general fund accounts, in violation of standard government accounting principles. The STO has fully exhausted its general fund appropriation, to the dollar, in each of the past five years. Separately, in FY2025 the Investment Management fund's parent pool of Other Funds fees brought in $10,353,410 against $10,129,395 in actual expenses -- a $224,015 surplus that itself exceeds the same statutory cap on fees not exceeding actual costs, carried forward as cash into the next fiscal year.
The takeaway
- A fund with a legal ceiling absorbed costs that don't belong to it. State law caps Investment Management fees at the fund's actual cost of doing business; $257,394 in crisis-PR, recruiting, and unrelated consulting fees pushed past that line with no documented justification.
- Some of the misdirected money paid to manage the STO's own accountability problem. Two of the four flagged charges, together $57,536, covered consultants working on a separate forensic review of the STO's finances -- work that landed on the investment fund's books instead.
- The missing piece isn't one bad invoice -- it's a missing rulebook. With no written cost allocation plan and 57 of 77 employees' pay split with no documented rationale, SCOIG says there's currently no reliable way for outside auditors to verify that any of the STO's fund-by-fund accounting reflects real costs.
SCOIG's findings describe accounting and internal-control failures, not allegations of personal enrichment or theft -- the report does not allege that STO officials pocketed any of the misallocated funds, only that the agency's bookkeeping obscured which fund actually bore which costs. Notably, SCOIG's language for these specific findings is consistently procedural ("inappropriate," "no legitimate basis," accounting-standards violations); elsewhere in the same report, findings the investigators consider potential misconduct are explicitly flagged as requiring further review by law enforcement, language absent from these findings entirely. The Office of the State Auditor, not SCOIG, has direct oversight of the outside audit firms (Deloitte, Suggs Johnson, and The Hobbs Group) named elsewhere in the underlying report; this piece does not cover those separate vendor relationships. The report's table of contents lists a section for "Office of the State Treasurer Response to the Report," but no such response appears anywhere in the document -- SCOIG's recommendations appear to be unanswered by the STO in this report's entirety, not only in the sections this piece reviewed.
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 on Section V ('Analysis of STO's Appropriations, Budgeting, and Spending') and Section VII ('Other Observations of Misallocation of Expenses'); the report's other sections (the Master Lease Program, reporting-statute compliance, and the Unclaimed Property Program) are covered separately or not covered by this piece. oig.sc.gov · original document
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South Carolina lets its Treasurer's Office (STO) charge fees to cover the cost of managing state investments -- but a state budget proviso is explicit that those fees "may not exceed the actual cost" of providing that service. A May 2026 investigation by the South Carolina Office of the State Inspector General⧉ found the STO routed $257,394 in vendor charges through that same Investment Management fund -- crisis-communications fees, employee-recruitment fees, and consulting costs tied to an unrelated internal review -- that investigators say have no discernible relationship to investments at all.