Gov. Nikki Haley gave stern warnings to state agencies asking to run a deficit and took a school administration to task for shredding financial documents at her tone-setting first meeting with the S.C. Budget and Control Board Tuesday.
The board approved only $100 million of a requested $225 million in deficit Medicaid spending for the Department of Health and Human Services, saying it would consider the other $125 million at the next meeting, if necessary. Newly appointed DHHS Director Tony Keck told the board that, without deficit spending, the agency would run out of money to pay hospitals and service providers by late March.
"It can't happen again," Haley told Keck. "We will not have deficits under my watch. We won't."
Meanwhile, the board allowed the Corrections Department more time to balance its $78 million budget, which is $4.8 million in the red. Last year, the agency ran a $28.8 million deficit, compared with $45.5 million the year before.
The Budget and Control Board, unique to South Carolina, has five members: the governor, treasurer, comptroller general, Senate Finance Committee chairman and House Ways and Means Committee chairman. It oversees state spending, and in recent years, various agencies have asked it to approve deficit spending, which is illegal under the state constitution.
During his time as governor, Mark Sanford criticized the board as costly and inefficient and pushed to replace it with a new Administration Department under the governor's control. The agency employs about 1,000 people, and outgoing Director Frank Fusco asked Sanford for $37 million in recurring state funds for this fiscal year. However, Sanford vetoed much of the agency's funding.
Haley took up the same cause Tuesday – to some audible groans – while addressing a representative from the John de la Howe special needs school in McCormick. School officials had shredded documents detailing the school's procurement process just before an audit, and there was some disagreement over how best to monitor what the school buys.
"This is all the more reason why we need a Department of Administration," Haley said.
"I know this is a drop in the bucket, but I'm scared to death of how big the bucket is."
Later Tuesday, Haley attended the House Constitutional Laws Subcommittee to push a bill that would create the Administration Department, along with two other bills that would give more power to the governor's office.
The Budget and Control Board meeting also was the first to be held in the Blatt building, the House of Representatives' office building, hosted in the standing room only governor's conference room.