An annual report from South Carolina’s State Inspector General shows a growing trend of fraud committed by state employees that topped more than $1 million in fiscal year 2024-2025.
The document focuses specifically on executive branch state employees, in order to test the integrity within the workforce and to maintain the public’s confidence by transparently publishing its findings, according to the report.
To identify employee fraud, the Inspector General uses reporting from each state agency, including law enforcement, the Office of the Comptroller General, the Office of the State Auditor, and open-source reporting.
In all, 12 incidents were identified involving 13 executive branch employees, which varied between executive/upper-level managers, supervisory employees, and front-line employees.
For FY 2024-25, there was a reported loss of $1,737,458, which, according to the report, was greater than the combined losses over the past three fiscal years, equating to $322,304, an average increase of 155%.
In a breakdown, the report shows there were five incidents involving bribery and kickbacks, which totaled $222,129. One incident involved procurement fraud, by far the largest of the incidents at a whopping $1,489,789. There were also four incidents involving theft topping $14,740. One incident involved forgery of $10,000, another was misconduct, totaling $800.
The increase in detected crimes is due to the increase in enforcement action taken by agencies’ internal inspectors and law enforcement, the report said.
“A consistent trend in the reported frauds for the past four fiscal years revolved around accountability in internal controls,” the report states. “The higher the employee’s position in the organization, the greater the employee’s access to larger funds, and thus led to correspondingly higher losses.”
Ten of the perpetrators involved were arrested and were subsequently terminated from their state employment, while two other schemes are still under active investigation.
Out of those incidents identified, two employees were charged with fraud for falsifying vendor certifications to a federal agency, and one state employee is currently under investigation for receiving at least $159,250 in improper cash and electronic payments from contractors with whom they personally conducted business.
One employee was arrested for accepting $22,879 in bribes while carrying out their employment duties, while another state employee was arrested after they accepted $20,000 in bribes for disclosing confidential information.
Other charges include theft/grand larceny, criminal conspiracy, forgery, insurance fraud, and computer crimes.
The report further notes that the Inspector General does not track incidents of fraud that are conducted by external parties against the state, which includes tax, Medicaid, pharmaceutical diversion, SNAP, unemployment insurance, or contract fraud.
