A recent report from the office of State Auditor Shad White cites a litany of 30 deficiencies in internal controls and/or instances of noncompliance with state laws by East Tallahatchie School District leaders during the 2019-20 fiscal year.
Findings of the “Limited Internal Control and Compliance Review Management Report” were issued March 7 with a cover letter from Deputy State Auditor Stephanie Palmertree to the ETSD Board of Trustees dated Feb. 8.
The fiscal year for findings contained in the report began July 1, 2019, and ended June 30, 2020, when Dr. Darron L. Edwards was the district superintendent.
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Edwards served as ETSD superintendent from July 1, 2018, to June 30, 2021.
Dr. Darron L. Edwards
Among report findings under the heading “Material weaknesses” were the following:
» The school district should strengthen internal controls over board and superintendent oversight.
The report cites Mississippi Public School Accountability Standards dictating that, “The local school board’s responsibilities shall pertain to matters of setting policy and shall not interfere in the day-to-day operations of the school district that include, but are not limited to, such duties as those relating to personnel and management decisions.”
The report stated that “the auditor noted operations in the school district were not appropriately overseen by the school board and the superintendent.”
» The school district should strengthen internal controls and ensure compliance with state law over financial operations of the district.
Noting “serious financial distress” within the district, the auditor recommended that the “state superintendent appoint a financial advisor and the school district cease expending district’s funds immediately.”
The report stated that at the end of October 2020, the District Maintenance fund had a balance of $460,638.85, noting “the majority of these funds belonged to other funds.”
The report also showed that since July 1, 2019, not all revenue had been recorded in the general ledger and the district’s bank statements had not been reconciled.
As of December 2020, the report noted that the district’s bank statements for District Management, Accounts Payable and Payroll still had not been reconciled since July 2019.
» Because the district’s bank accounts had not been reconciled to its general ledger cash balance since July 2019, there was a difference totaling negative $223,116.
Among another issue cited was the district’s inability to locate bank statements for a high school Activity and Club fund, meaning the auditor was unable to review that account.
» The report noted that on June 29, 2020, the board president — at the time, Darrell Neal — signed the superintendent’s new contract extension, at a salary of $121,000, without board approval, resulting “in noncompliance with state law and regulations.”
» The report said the school district should strengthen internal controls and ensure compliance with state law over 16th Section payments, deposits and appraisals.
Among the 16th Section findings were:
• Ten land appraisals could not be found in the district’s files.
• Seven lease payments could not be traced to deposit slips or bank statements.
• Six lease payments had not been paid to the district in one to three years; however, the lease agreements were not cancelled.
The report noted that the district’s noncompliance with 16th Section lands and funds was a repeat offense.
» Another recurring offense by the district was regarding minutes of the school board’s meetings.
Among the findings:
• There were 14 instances where topics such as hiring employees, resignations and student releases were improperly discussed during executive sessions.
• Purchase of a school bus was approved, but details of the purchase were not documented in the minutes.
• At the time of the audit, the district was unable to locate the board minutes for the months of January, March, August, September, October, November and December 2020.
» The auditor noted complete sets of financial reports were not presented to the school board for 21 out of the 22 months reviewed.
The report noted that state policy requires: “At minimum, the superintendent should provide [to the school board monthly] reconciled bank statements, a statement of revenues and expenditures, current budget status, a cash flow statement by month and a combined balance sheet or current fund equity balances.”
» The district did not advertise in the newspaper for competitive bids for two purchases totaling $161,005, including $91,715 to Synergetics for Chromebooks and $69,290 to Synergetics for Smart Books.
State purchasing laws require that the district advertise for bids for any expenditures in excess of $50,000.
» The report showed that the school board approved the purchase of two school buses totaling $135,000 without the authorization of the State Board of Education, as required by law to ensure they meet safety specifications adopted by the state.
» The auditor noted that six out of 20 certified employees’ background checks did not include fingerprinting as required by law to help ensure people with unsuitable backgrounds are not hired.
» Review of a sample of 20 of the district’s employment contracts and payroll found:
• Thirteen certified employees were paid $17,040 over their board-approved contract.
• Three certified employees were paid $6,450 less than their board-approved contract.
• Eleven contracts were not signed by the superintendent, and one was not signed by the employee.
• One returning employee had two different contracts with different start dates, but the superintendent only signed one contract.
The full report (attached to this story) lists more than 20 other instances of violations by the district during the 2019 and 2020 timeframe.
On Feb. 22, 2023, then Superintendent Marvell Hudson, as required by law, filed responses to the newly-released state report and noted a corrective action plan for each deficiency and instance of noncompliance with state law.
