The State Board of Education was told last week that 32 school districts have not filed audits from Fiscal Year 2023 and/or Fiscal Year 2024.
A revised version of the Mississippi Public School Accountability Standards by the State Board of Education on Thursday is expected to assist school districts catch up on late audits.
Discussion of ensuring public school districts were up to date on their required audits ramped up late last year when the Mississippi Department of Education took over the Okolona School District citing financial concerns.
“The thing is that we shined light on this starting in November, because it really became emphasized to the Board with Okolona, because it was a disaster,” Board Chair Matt Miller said. “There is just no other way to say that. We don’t want that any more and that was the whole purpose.”
Okolona Municipal Separate School District was placed into a District of Transformation as a result of serious financial impairments to include ongoing insolvency, failure to make payroll, a pattern of fiscal mismanagement, failure to maintain adequate internal controls, and failure to comply with Process Standards 4 and 5 of the Mississippi Public School Accountability Standards, 2025.
Chief Accountability Officer Dr. Paula Vanderford described the need for the revision to the policy that could potentially lead to a downgrade of a district’s accreditation status or even withdrawal of that status.
Currently, districts can exercise their right to a hearing up to 10 days after being notified of financial or academic concerns. A hearing of MDE staff and/or the Commission on School Accreditation would then be held.
After the existing policy went into effect two months ago, the backlog of audits showed signs of decreasing, but it is still too high for MDE personnel to tackle all at once.
Vanderford said in November, when audits became of topic of discussion after the takeover of the Okolona School District, about 19 districts were missing their fiscal year 2023 audit. That number has since declined.
“But that number is now down to 13,” Vanderford said.
According to the policy, school districts are required to complete audits within 9 months after the conclusion of each school year. She added that the number of districts still missing their Fiscal Year 2023 and/or Fiscal Year 2024 audits total about 32, which is still too many for MDE staff to prepare for and subsequently hold hearings to address.
As the upcoming March 31 deadline approaches for fiscal year 2025 audits, Vanderford has noticed audits are coming in faster than in the past.
“So, we have 63 districts that have already submitted their FY 25 audits,” Vanderford described. “So, we are seeing since this conversation began in November, and approval of this policy, we’re seeing an uptick and some positive movement forward in getting these audits turned around.”
Since the number of districts with outstanding audits is higher than staff can handle, Vanderford suggests focusing first on the worst offenders.
“I think we should start with those that are the most grossly negligent,” Vanderford explained.
Those would include the ones without a signed contract to have an audit performed and those that meet two or more of the following deficiencies of being districts missing two or more audits, districts with a negative fund balance, those with a maintenance fund balance below 7% and/or districts that have an adverse or disclaimer opinion.
“We will have to determine how we triage and address those that have the most serious financial findings,” Vanderford added.
Internal Audit Director Samantha Atkinson said some of the reasons for late audits cited by districts include administrative staff turnover, declining number of auditing firms who work for school districts, and auditing staff moving to larger firms that do not focus on small school district audits.
Board member Bill Jacobs said part of the reason the number of available auditing firms is dwindling is due to the $30,000 annual cost of PEER reviews to be able to legally conduct the work.
“In southwest Mississippi there used to be six CPA firms – two in Brookhaven, two in Natchez and two in McComb,” Jacobs said. “None of those do audits anymore.”
Board Member Glen East added that the policy revision will take into consideration when a district demonstrates effort to resolve issues through their own corrective action plan, and allow leniency when results are shown because they won’t move up the list of worst offenders.
The revised policy was adopted, with Board member Mike Pruitt abstaining, stating, “I think this is an incomplete solution.”
-- Article credit to Jeremy Pittari for the Magnolia Tribune --
