By Bri Hatch
Long-awaited results from the state-ordered forensic audit of Memphis-Shelby County Schools were released Wednesday as the legal battle continues over who will lead the district for the next four years.
The 667-page report on district finances and operations, completed June 30, identifies over $54 million in MSCS spending that serves as evidence of “potential” fraud, waste or abuse, primarily found in district contracts. That represents around 1% of the district’s multibillion-dollar budget from 2021 to 2024.
State Comptroller Jason Mumpower said the audit shows “systemic failures” in district management.
Initial findings from the audit released in April spurred the passage of MSCS’ state takeover law. But the nine-member oversight board that Tennessee Republicans say will correct district mismanagement is temporarily unable to assume control over key MSCS decisions. A federal judge issued an order blocking the board’s authority on June 30, the night before its four-year tenure was set to begin.
The ruling was an early win for MSCS and the local government leaders who filed a lawsuit challenging the takeover as unconstitutional last month. The temporary block will remain in place at least until the court holds a full hearing, which has not been scheduled.
Initial results from the forensic audit, released when the review was only 25% complete, identified more than $1 million in MSCS spending that auditors considered waste or abuse over a three-year period.
The preliminary findings also pointed to issues with leadership instability and staff retention that auditors said contributed to a lack of institutional knowledge and weaknesses in accountability and recordkeeping systems. MSCS has had four superintendents in the past five years, a trend Superintendent Roderick Richmond has said has undermined public trust and district management.
Days before the initial results were released, MSCS leaders adopted plans to strengthen internal controls and modernize document systems. Richmond pledged that more than 80% of the district’s employee files and 95% of payroll documentation would be complete by the summer.
The district issued a written response Wednesday after the audit’s release. “Independent assessments provide an important opportunity to strengthen accountability, evaluate operations, and identify opportunities for continuous improvement,” the statement read.
While pointing out that the report examines matters spanning multiple years, with the majority predating the current administration, the statement went on to say that “the District remains committed to transparency, accountability, and implementing any additional improvements identified through its review.”
Under the takeover law, Richmond has 45 days to identify the key issues outlined in the final report and present a corrective action plan to the board.
Bri Hatch covers Memphis-Shelby County Schools for Chalkbeat Tennessee. Reach Bri at bhatch@chalkbeat.org.
This story was originally published by Chalkbeat.
