COLUMBIA, S.C. (WACH, AP) -- South Carolina Hospitality Association officials say about $480,000 is missing from its account, but an audit found no evidence linking its founder to the lost funds.
The association announced the findings of an internal audit at a news conference Thursday afternoon. The audit still is not complete and is being conducted by Columbia-based accounting firm the Hobbs Group.
"What we heard is shocking. It is sickening," said Rick Erwin, S.C. Hospitality Association chairman. "It happened because there was little oversight and accountability by the management of the association and governing board over many years."
The association limited the forensic examination of its books to 2009, 2010, and 2011. It shows a pattern of misappropriation of funds that intensified over time.
"We could see a definite starting point in 2009 and then it appeared to escalate after that until the time we completed it," said Mark Hobbs, of the Hobbs Group. "And that's not too uncommon in these type situations."
The hospitality association said it is turning over the results of the internal audit to federal and local authorities.
The audit did not discover any "direct evidence" linking Tom Sponseller to the missing money. The U.S. Secret Service launched an investigation into the missing funds months ago, but an agent said Sponseller was never the target of their probe.
The former executive was found dead last month from an apparent self-inflicted gunshot wound in a room behind two locked doors in the parking garage under the association's office. Sponseller's suicide note mentioned his disappointment at hundreds of thousands of dollars missing from the organization he built over decades.
Erwin said Thursday that only Sponseller and the agency's former accounting director Rachel Duncan were in charge of handling the group's finances and that Sponseller "absolutely" had to know the money was missing.
Erwin says the results of the preliminary audit show money was being misappropriated through checks, deposits, payroll, and expenses. When asked if Duncan played a role he said "that's what it looks to be," and offered nothing more.
Duncan was fired by the association last week and is a person of interest in the federal investigation.
Since news of the federal probe came to light following Sponseller's disappearance, some questioned the stability of the state hospitality association. Shortly after the agency launched its own audit, the Myrtle Beach Area Chamber of Commerce set aside chamber dues that would normally be paid to the hospitality association until the investigation is over.
On Thursday, chamber leadership applauded the association for revealing the results of its audit.
"We are disappointed to learn of the problems uncovered following the recent audit of the South Carolina Hospitality Association but pleased to see the association moving forward," said Brad Dean, CEO of the Myrtle Beach Area Chamber of Commerce. "The board of directors should be commended for proactively addressing the concerns of its members statewide, along with the problems cited by auditors. We intend to support their efforts to rebuild the association moving forward."
On Thursday, the association's board voted to put safeguards in place to better monitor its finances, creating financial accountablity and restructuring committees to rebuild the agency as it moves to find a new executive director.
There is not a timetable set for when that person will be put in place.
"We cannot change the past. But, we can learn from it and make sure it doesn't happen again," said Erwin.
(The Associated Press contributed to this report.)