COLUMBIA, S.C. (AP) - Benefits for South Carolina's jobless residents hang in the balance as the governor and officials at the state's unemployment agency continue to disgree over how the department functions.

Gov. Mark Sanford issued a list of conditions on Monday that included what information the agency would have to collect and that demanded an audit of its operations by the state.

Unemployment officials disagreed and made a counteroffer that included an audit by the federal government.

New proposals are expected Tuesday.

South Carolina will run out of money to pay unemployment benefits unless the governor asks for federal money.

Sanford says he first wants an audit of the agency and better information on who is out of work.

(Copyright 2008 by The Associated Press. All Rights Reserved.)