‘We don’t want any more Okolonas.’ State officials say their crackdown on schools with missing audits is working ...Middle East

The number of school districts missing annual financial audits is going down, falling to 32 from 47 since the Mississippi Department of Education has drawn attention to this issue, according to Paula Vanderford, the agency’s chief accountability officer. 

She told the state Board of Education Thursday that 19 districts are behind on the most recent year’s audit, and another 13 are missing audits for both fiscal years 2024 and 2023. Most have a plan in place to become compliant, Vanderford said. 

Education Department leaders have taken steps to be more proactive about struggling districts — amid a slew of fiscal issues and school takeovers. In recent months, the department took over two school districts — Wilkinson County and Okolona — the latter stemming from financial woes. 

READ MORE: ‘We can only go up from here’: Hope and apathy in Wilkinson County schools

Missing audits, which are required by federal law, can mask urgent financial problems at school districts. 

In October, Okolona school district leaders reached out to the state education agency because they could not make the following month’s payroll. 

The state Board of Education approved taking over the district in November and subsequently voted in January to approve a temporary rule change that would put school districts with two or more outstanding audits on probation or downgrade their accreditation. Before, school districts could have missed filing four consecutive annual audits before potentially losing accreditation. 

The board made the rule change final on Thursday, ramping up accountability for districts behind on their audits.

“We don’t want any more Okolonas,” board chair Matt Miller said.

Some of the factors driving the missing audits are school administrative turnover, a lack of district business managers, auditor staffing shortages and the burdensome federal funding portion of the audits themselves, said Samantha Atkinson, director of the agency’s internal audit department.

“We do have a problem in Mississippi with a lack of CPA [accounting] firms that do audits for a number of reasons of which we can’t control,” board member Bill Jacobs said. “I don’t want to penalize a school district because there is an issue with finding CPAs that can do or will do the audits.”

But Vanderford said the agency is federally mandated to sanction schools missing their audits and doing so is in the public’s interest.

Miller said he was pleased with delinquent districts’ progress since November. 

School districts have until March 31 to submit financial audits for fiscal year 2025. Vanderford said at the meeting that this year’s audits are “coming in at a much faster pace.” Already, 63 of the state’s 138 public schools districts have submitted audits. 

Education officials have suggested suspending funding as a last resort for noncompliant districts.

There is “no way” the state Education Department’s Office of Accreditation would have capacity to review 32 districts at one time and downgrade their accreditation status, Vanderford told the board Thursday. Instead, if many districts are out of compliance this year, the agency would have to focus on the most egregious violators.

School districts across the state are facing more than financial struggles. On Thursday, the state Board of Education also approved 12 corrective action plans for districts that were largely sanctioned for fiscal and recordkeeping violations.

A majority of the districts with corrective action plans, which are meant to help districts correct issues of noncompliance with accreditation policies and process standards, are located in the Mississippi Delta. Jackson Public Schools, one of the state’s largest school districts, was put on probation in October for issues with school board policies, residency requirements, immunization requirements and student records. 

However, violations at two districts proved too severe for board approval. The board denied corrective action plans for Hazlehurst and North Bolivar school districts.  

Hazlehurst, which has been on probation for a decade, has been docked for issues such as poor recordkeeping, school board governance issues, dangerous campus conditions and not providing some special education services. With North Bolivar, the agency has also taken issue with the district’s nonfunctional alternative school, missing proof of employment for staff, poor recordkeeping, illegal school board policies, faulty financial reporting and poor fiscal management. North Bolivar schools have been on probation for nine years.

Vanderford said the agency needs to work more closely with both districts to bring them into compliance. Documentation from the agency also notes that districts have made insufficient progress in implementing the corrective actions detailed in their respective plans.

If the Hazlehurst and North Bolivar districts don’t correct their deficiencies by Dec. 31, they will be subject to an unannounced on-site audit or their accreditation may be withdrawn. Then, the state could take over those districts. 

But the state Education Department may not have the capacity for many more state takeovers. 

The state runs six school districts. State Superintendent Lance Evans said recently at a legislative meeting that there is only $4.8 million available to provide assistance to school districts taken over by the state. Since taking over Okolona schools, the agency has already spent $1.5 million. 

Evans has asked lawmakers for additional funding for next fiscal year.

Reporter Leonardo Bevilacqua contributed to this story.

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