Memphis-Shelby County Schools Superintendent Dr. Roderick Richmond is disputing the public framing of a state-ordered forensic audit, arguing the report offers only observations and recommendations for problems already identified and addressed by the district.
In a message to MSCS families and employees, Richmond placed the transactions in question within the broader context of the district’s nearly $6 billion budget for the three school years examined by an accounting firm hired by the state comptroller’s office.
He noted the total amount identified by auditors — $54.1 million in potential fraud, waste or abuse, along with $65.1 million for internal policy noncompliance and $291,000 for federal grant noncompliance — represents about 2% of the public funds managed by the district from July 2021 through June 2024.
“We will acknowledge where improvements are needed, build upon the progress already made, and remain transparent with our community as we continue moving this District forward,” Richmond wrote. “Our commitment to continuous improvement did not begin with this audit, nor will it end with it.”
During the period covered by the audit, the district saw several changes at the top.
Dr. Joris Ray, the district’s superintendent when the review period began, served until August 2022 when he resigned amid an investigation into allegations that he abused his authority and violated district policies in connection with alleged relationships involving district employees. Interim Superintendent Toni Williams replaced Ray, leading the district until Dr. Marie Feagins took office in April 2024, three months before the end of the audit’s review period.
Feagins’ tenure lasted less than 10 months. In January 2025, a sharply divided school board voted 6-3 to fire her, citing allegations of professional misconduct and poor leadership — allegations Feagins disputed as false and politically motivated.
The rapid succession of leaders meant that even well-intentioned administrators, who faced repeated changes, were subjected to different personnel, priorities and operating systems. The forensic auditors said that turnover contributed to staff losses, eroded institutional knowledge and created conditions for the possible loss of records, responsibilities and established procedures.
Against that broader backdrop, Richmond said the district is not attempting to minimize the auditors’ assessments.
“Providing that context does not diminish the importance of any concern raised,” Richmond wrote. “Rather, it reflects the overall scope of the audit while reinforcing our commitment to responsible stewardship of taxpayer resources and continuous improvement.”
But the 667-page final report, prepared by CliftonLarsonAllen LLP for the Tennessee Comptroller of the Treasury, uses language that goes well beyond routine suggestions for improvement.
State Comptroller Jason Mumpower offered a much harsher assessment of the report’s conclusions.
“The failures identified in these reports are unacceptable,” Mumpower said in announcing the audit’s release. “This review documents years of poor management, weak internal controls, inadequate oversight, and a culture where policies were too often ignored instead of followed. Public education depends on public trust, and that trust has been damaged.”
Mumpower said the issues were not isolated mistakes, but “systemic failures” across the district’s governance, procurement, contracting, financial management and recordkeeping that require sustained corrective action.
Auditors said evidence indicated that transactions totaling about $54.1 million were consistent with professional fraud-examiner guidance describing potential fraud, waste or abuse, including $250,000 classified as potential fraud, $763,124 as waste and nearly $53.15 million as abuse.
Auditors also identified $65.1 million in transactions that did not rise to the level of potential fraud, waste or abuse, but failed to comply with district policies and procedures. Another $291,000 involved potential noncompliance with federal grant requirements, auditors said.
Together, the report called out transactions totaling about $119.5 million.
For parents and community advocates, that total raised questions about what the money could have provided inside district classrooms.
“All these children can’t read, but we can have reading programs. We can have ready-to-work jobs,” Memphis parent Marcus Randolph said during a July 10 news conference organized by the education advocacy group Memphis Lift. “It’s so much we could’ve done with $119 million.”
The group gathered outside the former Shannon Elementary School to demand greater accountability for district spending.
Observations versus findings
Richmond’s response hinges partly on how the report characterizes its conclusions.
“Formal audit findings identify instances where auditors determine an organization did not comply with applicable laws, policies, or required processes,” he wrote. “This report did not contain formal audit findings and instead presented observations and recommendations for strengthening operations, governance, and internal controls.”
That distinction is reflected in the report’s structure. The accounting firm, CLA, labels its findings as “observations” and accompanies them with recommendations.
Still, the forensic audit’s stated purpose was to assess whether evidence of potential fraud, waste or abuse by district employees or the school board existed. CLA concluded that such evidence did exist in specific transactions.
The auditors said those determinations were based on factors including payments for work not performed, deficient or negligent work, unsupported or duplicative billing, inadequate oversight and contracting or payment activity that occurred outside established procurement controls.
The largest single amount, $48.43 million, identified by auditors was connected to a custodial services contract classified as potential abuse. According to the report, the contract was directed to one vendor outside the evaluation committee’s recommendation and without documented justification.
Other questionable transactions involved $3.1 million for a vendor with a reported conflict of interest with a district employee who could influence vendor selection, $400,000 paid for work that MSCS determined was deficient or negligent, and $250,000 paid for work the district determined had not been completed.
Auditors used risk analysis and transaction sampling for forensic testing. Although only 2% of district transactions over three contract periods were formally called into question, no conclusion can be drawn about whether the remaining 98% of expenditures were individually examined and cleared.
CLA said it analyzed district financial data, reviewed contracts and supporting documentation, searched public records and emails, and conducted more than 142 interviews. The firm also said its work was hampered by delayed or incomplete records, fragmented record-keeping and procurement information spread across multiple systems.
Dianechia Fields, director of operations for Memphis Lift, said the audit’s historical scope does not answer whether similar practices have continued since the review period ended.
“If it happened then, from ’21 to ’24, what is happening in 2026?” Fields said at the group’s news conference. “That’s why we’re here today, to demand that our tax dollars do what they’re supposed to be doing.”
District says action began before final report
Richmond emphasized that the audit period predated his current administration, but the district had already begun rectifying the issues raised in the final report before its release.
“The report also reflects that many of the matters discussed were not uncovered by the forensic audit itself,” Richmond wrote. “Rather, they had already been identified by the District through its own internal auditing processes and were addressed during the review period.”
District actions included referrals to federal law enforcement, lawsuits seeking to recover public money, personnel actions, contract terminations and other corrective measures, he said.
“This demonstrates that our internal auditing processes were functioning effectively by identifying concerns, initiating corrective action, and holding individuals and entities accountable,” Richmond wrote.
The audit’s findings, however, raise significant questions about the structure and independence of the district’s internal audit function.
CLA said the department lacked a comprehensive inventory of auditable operations, a formal risk assessment and risk-based annual and multiyear plans. Auditors also said the chief audit executive reported functionally to the district’s legal department and administratively to the superintendent, instead of maintaining a direct functional reporting relationship with the school board’s audit committee.
The report described an internal audit operation that performed important work but lacked the structure, documentation, independence and strategic alignment necessary to function as a fully effective, risk-focused assurance operation.
Other districtwide weaknesses cited in the report included outdated or missing policies, poor record retention, inconsistent contract and vendor oversight, inadequate segregation of financial duties, insufficient monitoring of computer-system access and failures to document required approvals.
Auditors also reported that MSCS could not produce 86 of 250 employee eligibility forms selected for review and that leadership turnover had eroded institutional knowledge. CLA said repeated interviews were sometimes necessary, because employees lacked consistent knowledge about past processes, systems and decisions.
Richmond highlights ongoing reforms
Richmond said his administration began reviewing the district’s internal controls, operations and organizational systems during the leadership transition in 2025, rather than waiting for the forensic audit to be completed.
He pointed to an “Operational Modernization and Excellence Plan” aimed at strengthening procurement, payroll oversight, digital systems and compliance. He also cited changes to the competitive procurement process, public accountability updates and the district’s first long-range facilities roadmap.
His letter does not directly challenge the auditors’ classification of individual transactions or specify which of the report’s dollar amounts the district believes are incorrect. Instead, Richmond focuses on the report’s terminology, the scale of district operations, corrective work already underway and the need to keep the controversy from overshadowing student achievement.
He noted that MSCS has earned the state’s highest academic-growth rating for four consecutive years, increased its Ready Graduate rate and posted preliminary 2026 gains in English language arts, math and social studies.
“An audit can evaluate our systems,” Richmond concluded. “It cannot measure the heart of this District. That is found in our educators, our employees, our families, and, most importantly, our students.”
