(The Center Square) – An audit of Memphis-Shelby County Schools shows $1.1 million in disbursements categorized as waste or fraud and auditors said only 25% of the contract review is completed.
Comptroller of the Treasury Samuel Mumpower said the report shows clear evidence of management failures. The issues ranged from what auditors called “significant and recurring weaknesses in internal controls” to issues with record management and procurement practices.
“These audit results are staggering, and some of the worst I’ve seen in my 45-year career,” said Director of Local Government Auditor Bryan Burklin. “There are breakdowns at nearly every level in the business and operational management of MSCS.”
Republicans issued scathing remarks about the audit.
“I think what this audit shows is the Memphis-Shelby County School System is about as organized as a $5 bin at the Walmart,” said Sen. Brent Taylor, R-Memphis. Taylor has advocated for a state takeover of the school system.
House Speaker Cameron Sexton said the audit does not account for the school district’s academic failures. The Tennessee State Report Card shows the school district below the state average in achievement rates for all grades.
“We must right this financial mess, fix the academic failure and continuing fighting crime. Memphis is too important for us to not intervene,” Sexton said in a social media post.
State Democrats said while the audit highlights areas that need improvement, it does not justify overreaction.
“At the same time, it is important to be clear about what this audit did – and did not – find,” said Senate Minority Leader Raumesh Akbari and House Minority Leader Karen Camper, both of Memphis. “There is no fraud and no evidence of a systemic financial breakdown. The findings represent less than one-tenth of 1% of the district’s annual budget, though they still require serious attention and corrective action.”
The audit showed $1.7 million in transactions did not comply with district policies and procedures but were not at the level of waste or abuse, according to the comptroller’s office.
The 329-page report also shows $33,159.97 of wasteful payroll-related transactions. One was a disbursement of more than $21,000 to an employee who was still being paid four months after leaving a position with the school district. More than $11,800 was a duplicate vacation payout to an employee, according to the audit.
The audit showed pictures of a room secured only by a curtain that contained employee form I-9, which verify identity and the legal right to work in the U.S. Only 100 of 250 forms requested by auditors could be located, according to the report.
Memphis Shelby County Schools’ officials said they will release their response to the audit on April 6.
“We take full responsibility for any system challenges brought to light, including supporting required action if any wrongdoing has transpired,” the school district said in a statement. “Over the past year, we have improved many of our processes and developed pathways for greater academic achievement.”
