Beaufort County orders audit of tax-funded group after years of “no oversight”
After nearly a decade, a nonprofit agency tasked with leading economic development in Beaufort County is going to have to show where and how some big money has been spent. And, for the first time, they are going to have to share the findings with county’s leaders and taxpayers who have been footing the bill.
The Beaufort County Economic Development Corporation, which has received millions in public money to attract new industry and business on behalf of local municipalities, is being audited for the first time.
The BCEDC has received more than $12 million in public dollars from Beaufort County, Hilton Head, Bluffton, Beaufort and Port Royal toward those efforts — nearly $11 million of which came from Beaufort County. The organization’s executive director estimated that 95% of their funding comes from public dollars.
The audit request is the latest example of the increasing scrutiny that some elected officials have had toward the organization. During budget season, the town of Port Royal and Beaufort County scaled back funding to the BCEDC. County officials have also discussed implementing new “guardrails” for financial oversight.
County Councilwoman Paula Brown, the county’s liaison to the economic development group, questioned the value of the land the group plans to purchase and the process used to distribute its grants during a recent council meeting.
“There has been no oversight or internal controls on the taxpayer money the BCEDC is spending,” Brown later said.
Despite its name, the organization is a separate entity from the Beaufort County government. It has its own set of bylaws and articles of incorporation, and it is overseen by a board of directors made up of elected officials, representatives from private businesses and local universities.
Hilton Head Island Mayor Alan Perry, Bluffton Mayor Larry Toomer, Beaufort County Councilwoman Paula Brown, Beaufort Mayor Phil Cromer and Beaufort County School District Superintendent Frank Rodriguez are among the elected officials who sit on the board.
‘This is public money. This is our responsibility’
Beaufort County requested the organization’s audit, which will be conducted by an independent firm by November. It is the first time that the publicly-funded agency will be the subject of an audit since it was formed in 2016, according to John O’Toole, the organization’s executive director.
The county has never received an audit from the organization, nor is there a record of the county officially requesting one, said Hannah Nichols, the county’s spokesperson. County policy calls for organizations like the BCEDC that receive money collected from property taxes to have an annual audit on file.
When asked if she was concerned that the agency had never been subject to independent financial review, Tab Tabernik, the county council’s vice chair, said “absolutely.” Tabernik said she has been one of the voices on council supporting the need for additional oversights and a formal financial review of the BCEDC.
“The county is the primary funder,” she said. “This is public money, and they [the BCEDC] need to be accountable to the public.”
The BCEDC’s own bylaws call for the corporation to maintain accounting records and to have its accounts “reviewed by its outside accountants at the end of each fiscal year.”
O’Toole said that this is in reference to 990 forms — a public tax document that most nonprofit organizations in the U.S. have to file with the IRS each year — not independent audits. The corporation uses an external accounting firm to prepare those reports, O’Toole said.
The group has submitted the necessary filings to stay in compliance with the South Carolina Secretary of State, according to Deputy Secretary Melissa Dunlap.
The independent audit will account for the 2024–2025 fiscal year. The firm will begin its audit in September or October and will cost $25,000, according to the group’s engagement letter with the firm, Maudlin & Jenkins.
O’Toole does not foresee any issues — like errors, fraudulent financial reporting, misappropriation of assets, or violations of laws or governmental regulations — arising from the audit, he said.
“An audit is not like a swear word or a bad word. An audit can be very healthy,” he said. He went on to say that the audit will serve as “a useful tool” going forward.
What happens next?
In June, the town of Port Royal withheld its usual $42,000 annual contribution to the taxpayer-funded BCEDC. The town wanted to boost business within their own borders rather than contributing to the regional economic agency, they said at the time.
Beaufort County also reduced funding for the BCEDC’s “job and site” fund from $3.5 million to about $900,000. That fund is tapped to purchase and prepare sites for development.
The county’s chief financial officer, Pinky Harriott, previously told The Island Packet that the job and site funding is being reduced because a large economic development project that the BCEDC had been anticipating did not come to fruition.
The county is in the process of creating a new set of guidelines for how the BCEDC spends and distributes money. The guidelines will come forward to the council’s finance committee on Aug. 18. It will then be brought forward to the council for a vote.
Nichols was “unable” to share details about the guidelines. Land purchases conducted by BCEDC already require county council approval, according to O’Toole. This was confirmed by Nichols.
The story has been updated to reflect O’Toole’s contention that some, if not all land purchases by the corporation are subject to county approval. Also, he also contended that the reductions of funds from the county were a result of a stalled project.
This story was originally published August 14, 2025 at 10:41 AM.
