A forensic audit of the Town of Calhoun Falls has uncovered widespread financial mismanagement, budgetary failures, and questionable practices by Mayor Terrico Holland and other officials — a conclusion provided by a report issued this month by CRI Advisors, LLC on behalf of the South Carolina Office of the State Auditor.
The report, which covers fiscal years 2020 through 2024, outlines a breakdown in internal controls, unsupported spending, and repeated violations of state law and local ordinances. Among the most serious findings: over $90,000 in state funds were withheld because of missing audits, and the town’s utility fund is running annual deficits of nearly $300,000. These deficits were frequently covered by transfers from the general fund, totaling over $842,000 across the review period.
The Index Journal reached out to the town of Calhoun Falls as well as members mentioned in this article, no comment was provided.
Credit card use and lack of oversight
Credit card spending totaled $186,567 across the audit period. While spending was lower under former Mayor Chris Cowan (with 98% of charges supported by receipts), that trend reversed sharply under Holland. From FY2022 onward, only 56% of charges were supported.
Holland reportedly told auditors, “When you’re broke, you don’t go out to eat, you make a ham sandwich.” Yet under his administration, town credit card usage nearly doubled.
Meals were a significant portion of spending, with $17,481 logged, 66% of which were in-town meals rather than for travel-related expenses. In FY2024, there were 278 meal charges, more than the number of workdays in the year.
Purchases were often vaguely categorized as “contingency” expenses, and the town kept no consistent record of what department each purchase served.
In addition to meals, auditors flagged numerous credit card purchases on platforms like Amazon, where itemized receipts were not submitted.
Often, town officials combined minor supply runs with larger meal expenses, buying a small part or piece of equipment, then spending $30–$50 on lunch during the same outing.
CRI noted that many of these charges lacked supporting documentation, and most occurred locally, not as part of approved travel. Without itemization, auditors could not confirm what was purchased, by whom, or for what department.
Auditors found that credit card receipts were rarely submitted, especially by Holland and Police Chief Tim Richey. Town Clerk Wendi Lewis admitted that nine out of 10 receipts were never turned in. Transactions were generally logged under the vague category “contingency,” with no departmental attribution.
Audit avoidance, financial blackouts
The forensic audit continues by stating the town failed to complete or submit required annual audits for FY21 through FY24, violating South Carolina law.
Only one audit, for FY2020, was completed under Holland, and it was never submitted to the State Treasurer. This failure resulted in over $90,000 in withheld state funding and rendered the town ineligible for certain grants from the state.
Financial reporting to the town council also ceased shortly after Holland took office in January 2022. Under his leadership, council members no longer received monthly updates or access to budget reports.
Calhoun Falls council member LaSean Tutt says before the audit, she was requesting information that should have been given to council.
“To this day, I have not received anything from what I requested. The sad part is that I can’t vote properly without all the data necessary for my informed decision,” she said.
Other council members were interviewed by CRI and expressed frustration with the lack of transparency.
“We didn’t know what we owed until something got cut off or someone complained,” one councilmember stated in the report.
Auditors noted that under Cowan, council received regular budget updates and financial statements.
Under Holland, however, reporting stopped almost entirely. Monthly reports were inconsistent or nonexistent, and some council members reported being denied information even when they requested it.
Bonuses, raises, and off-books spending
The forensic audit showed from FY2020 to FY2024, the town issued $83,365 in bonuses. During FY2023 and FY2024 alone, $30,515 in bonuses was distributed off the books in cash, not reported through payroll and not subject to taxes or proper documentation. These bonuses were not approved by council and violated accounting principles and transparency standards.
Raises were issued across departments without budget amendments or formal approval. Holland allegedly told council that raises would be covered by the American Rescue Plan Act (ARPA) funds, but auditors found no written plan or justification.
Federal relief through ARPA briefly propped up the town’s finances, but the nearly $947,000 served more as a bandage than a fix. Once the funds were exhausted, long-standing deficits surfaced with renewed urgency.
During this time, the town also gave out overtime to employees not eligible under its own policies. Utility, police, and wastewater employees received overtime pay typically reserved for maintenance workers. The police department’s costs alone rose 74% from FY22 to FY23.
Auditors noted that the only reason overtime decreased was the hiring of more staff, not any operational reform.
Court fine cash collections held back
According to the report, Clerk of Court Stephanie Copelan withheld over $3,700 in court fine cash collections to create an informal petty cash fund. She told auditors that she used the money to buy stamps, toner and office supplies because it was difficult to get checks signed promptly.
While receipts were provided for some of these purchases, the entire process violated accounting standards. The diverted funds were never entered into the town’s financial records, and their use lacked full documentation.
Volunteer firefighter pay and property sales
Volunteer firefighters were paid $10 per call and $2 per training session. However, the town had no formal attendance policy, and auditors found that people were paid for events they did not attend. In one instance, 19 responders were paid for a single downed tree.
In May 2024, the town sold a property at 501 Seneca St. for $4,500. Auditors found no record of the sale in financial systems, no documentation in council minutes, and no indication of whether fair market value was assessed.
General and utility fund transfers
To keep the utility fund afloat, the town transferred $842,167 from the general fund between FY2020 and FY2024. These transfers were often made without approval forms or signatures, and sometimes based solely on account balances at the time.
Council members were not regularly informed of these fund transfers. Although the town had a Fund Transfer Approval Form, CRI found that most were unsigned or incomplete, and many transfers were not formally documented.
Banking, court funds, and signature stamp use
Holland’s signature stamp was widely used on checks, sometimes without his direct review. After March 2023, most checks bore his stamp rather than his physical signature, meaning dual-signature requirements were functionally ignored.
Water system failures, utility mismanagement
The utility fund, Calhoun Falls’ largest financial liability, was deeply in the red. Broken or nonfunctional water meters, especially among commercial accounts, resulted in mass under billing. Instead of billing estimated averages per town ordinance, clerks often skipped billing entirely.
Meanwhile, the town experienced an annual water loss of 40–50%, a sign of leaks, theft or unmetered usage. Despite these issues, utility rates have not been raised since 2020, further compounding losses.
Auditors noted that “approximately 40–50% of the Town’s utility deficits are caused by broken meters and unbilled usage.”
Vendors, procurement failures
Vendor invoices were routinely paid late, incurring fees. Some vendors severed relationships with the town. There was no centralized procurement process or competitive bidding for contracts, including the rehiring of the town’s accountant, without council approval.
Forensic audit recommends reforms
The 58-page forensic audit, which can be accessed in its entirety with this article on indexjournal.com, recommends 26 corrective actions, including adopting financial policies, modernizing billing and procurement systems, ensuring budget adoption, and implementing infrastructure audits. Without swift intervention, auditors warn, Calhoun Falls risks continued financial instability, possible legal action, and erosion of public trust.
Contact Renee Ortiz at 864-943-5643. Follow her on X at: IJReneeOrtiz
