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‘Forensic audit’ sought for Loris hospitality fund



     Spending from a state hospitality tax fund totaling some $1.45 million in the past four years, apparently without approval by or knowledge of Loris City Council has triggered a request for a “forensic audit’ of those funds.

     Council member Carroll Padgett, an attorney, called for the audit following a closed session at the end of Monday’s council meeting.

Artist Tommy Simpson at work on a Duncan Street mural in Loris during the summer of 2022. More than $22,000 from the Loris hospitality fund appears to have been spent for the mural that appeared on a Duncan Street building owned by Jerry Dalton last summer, member Carroll Padgett told the Loris City Council Monday. (Jenn Causey, TLT)

     Padgett said the spending may have violated state law, Loris ordinances, and the city’s procurement code.

     Padgett provided specific information on the expenditures from January 2019 to the present, “the majority of which I believe has not been authorized by city council.”

     Council’s vote was unanimous, and came after member Jan Vescovi asked how the audit would be paid for, and attorney Kenneth Moss noted that the term “forensic audit” was open to some interpretation.

     Council authorized City Administrator Clay Young to solicit bids for an audit, and to bring those with a recommendation to council.

     Padgett said his decision to seek an audit did not come easily.

     “It’s with a heavy heart and sorrow, I make a motion for Clay to seek out and hire a council approved CPA or firm to do a forensic analysis of the hospitality fund,” Padgett said.

     Padgett said his goal was that the audit be completed quickly, and that council meet on Oct. 30 in a special session to receive “preliminary findings.”

     Council said the goal of the audit should be to find out “who checks were for, focus and look for receipts, invoices, was council related to this person, who authorized and signed checks and are there any memos.”

     Mayor Todd Harrelson, on Tuesday, issued a statement endorsing the audit.

     “I think we should audit everything,” Harrelson said. “Anything questioned should be audited.”


     Padgett systematically laid his findings of hospitality fund spending during the past four years that appears questionable and done without the knowledge and approval of council, including:

  • May, 2000: A $204,531 loan from the hospitality fund that does not appear to have been repaid.
  • January 2021: Another loan from the fund to council of $36,451. There is no evidence that the loan has been repaid, Padgett said, calling it another example of action taken without council knowledge or approval. “We didn’t know.”
  • July 2022: A check for $1,002.57 from the fund was written to Anderson Brothers Bank.
  • August 2022: Another check was written to Anderson Brothers Bank, this one for $10,856.89. There was no memo on the check, no explanation “as to why,” Padgett said.
  • October, 2022: A $5,000 check was written to Synovus bank, without an endorsement.

     For more on this story see this week’s Tabor-Loris Tribune in print and online.