School districts with two or more outstanding audits will either be put on probation or lose their accreditation under a temporary rule change the Mississippi Board of Education approved Thursday.
Before, school districts could have missed filing four consecutive annual audits before they faced losing accreditation. Other consequences remain in place, which include possibly blocking the drawing down of federal funds and being prevented from applying for more.
The temporary rule change is an urgent response to concerns about the finances at Mississippi’s school districts.
In November, the Mississippi Department of Education took over Okolona schools because of the district’s dire financial situation. The district was unable to make payroll because of low cash reserves. The state took over Wilkinson County schools on Thursday for academic issues, but agency officials also noted difficulty parsing the district’s financial documents.
Okolona and Wilkinson are among 47 school districts that have failed to file one or more financial audits — a finding department officials had previously brought before the board.
When asking the state board to approve the temporary rule change, top compliance and accountability officials at the state education department argued that late financial reporting can compromise public welfare.
“It’s not being a few days late or it’s not for being a couple of months late,” Paula Vanderford, chief accountability officer at the Mississippi Department of Education, said during the state board meeting. “We’re talking about having outstanding audits where there’s no information within the agency regarding their financial status.”
Temporary rules can go into effect immediately upon filing with the Mississippi Secretary of State, unlike permanent rule changes, which would require the education department to wait at least 25 days to gather public comments as well as a more thorough filing.
Chair Matt Miller during a board of education meeting on Dec. 18, 2025 in Jackson. Credit: Vickie D. King/Mississippi Today“In November, we sounded the alarm about this, and in 60 days we have action,” state Board of Education Chairman Matt Miller said Thursday about addressing the backlog of school district financial audits and preventing additional state takeovers of school districts. “This is the action I envisioned we’d take.”
“To those out there who I will not name who say we’re not doing anything about it,” he said. “This is something we’re doing about it.”
Up-to-date audits not only give state education leaders insight into school district finances, they also are required under federal law.
Districts that miss one financial audit would face more frequent monitoring and check-ups by state education department officials and may receive agency approval to draw down some state administered funds per federal guidance.
Other factors have also contributed to a backlog of school district’s on-time financial audit submissions, including a shortage of approved auditing firms. Also, some school districts can’t afford the audit firms’ rates.
The Mississippi Office of the State Auditor sent out a December memo that requires audit firms to provide written justification to the director of audits prior to preparing new reports. The auditor’s office also agreed to prioritize school audits before the March 31 deadline.
At the Thursday state Board of Education meeting, Vanderford and Kym Wiggins, chief operating officer for the education department, stressed the importance of early intervention to prevent further state takeovers. That can be a challenge.
“There is such a profound lack of skilled persons to do that work,” Wiggins said. “There is a tremendous need for capable assistance. We’re trying to figure out here in our office how we can build that infrastructure here to provide those supports at the district level beyond just our regular annual certification.”
The agency’s Office of School Financial Services has also agreed to increase its availability to school districts that need technical assistance.
Does the agency have the capacity to handle more monitoring and intervention? “We feel this is important, necessary work and we always manage to get it done,” Vanderford said.
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