Jackson Free Press

JACKSON, Miss. (AP) — The state of Mississippi is stepping in to oversee finances in a school district in one of the nation's poorest counties, which has been adjusting in recent years to consolidation.

The Holmes County Consolidated School District's spending will be managed by Mississippi Department of Education Chief Operations Officer Felicia Gavin until another state-appointed adviser takes over, Mississippi Department of Education spokeswoman Patrice Guilfoyle said.

The decision was made after an audit for the fiscal year ending June 30, 2019, found the district was unable to provide receipts for some expenditures and did not have a clear system for documenting spending and payments.

Auditors for Fortenberry & Ballard, PC, an accounting firm in Brandon, wrote that the district lacks an “internal control system that will ensure strong financial accountability, proper safeguarding of assets, and accurate accounting records.”

“The accounting mechanisms and procedures were so out of array that there’s just absolutely no way for an auditor to say ‘what is what,' frankly,” state auditor’s spokesman Logan Reeves said. “It is unauditable.”

Holmes County School District interim Superintendent Benjamin Torrey did not reply to requests for comment on the audit.

Torrey is the district's second interim superintendent since July, when former Superintendent James Henderson left to head a district in the Chicago suburbs.

In a phone interview Tuesday with The Associated Press, Henderson said the district faced financial instability before the Holmes County and Durant school systems consolidated in 2018. The consolidation worsened existing issues, he said.

“It was a mess when I walked in,” said Henderson, who joined the district in 2018.

A state-appointed conservator was placed in the district, Henderson said. She worked on finances throughout the consolidation transition and was hired back later as a consultant.

State Auditor Shad White has expressed concern about the district's bookkeeping at least once before recently. A report released in December described what White called “widespread problems” with district spending.

Among the allegations were that Henderson was overpaid by $20,000 during his two years in the district and that $14,000 in payments were made to companies owned by Henderson’s relatives.

Henderson said he thought the state auditor's office misrepresented the situation.

The audit said school board minutes showed the board approving a $160,000 a year salary for Henderson. However, Henderson's contract, provided to The Associated Press, shows he was approved for $170,000 a year by the school board.

Anthony Anderson, then-president of the school board, said the board approved the $170,000 contract, but a mistake was made with the minutes.

Anderson said the board purchased food from Henderson's family restaurant to feed members during meetings. He said Holmes County is a small community and there aren't many restaurants; officials were aware of Henderson's familial connection and it did not concern them.

Auditors said the conflict should have been disclosed on paper.

The auditor’s office also found about $12,000 worth of credit card transactions that were not documented by receipts. Henderson said he never made any purchases without first clearing them with the board.

Henderson said he returned to his home county to improve the learning environment. The district is tremendously underresourced and students are not getting the education they deserve, he said.

During his time there, he drastically increased the number of licensed educators in the district and saved it millions by reorganizing positions, he said.

Anderson, who is now school board secretary, said Tuesday that problems in the district are long-standing and move beyond just one person. He said the district needed more guidance from the Department of Education after it consolidated.

“I can say that I feel that MDE is offering the support that they should have offered at first," Anderson said.