The Mississippi State Auditor’s office, led by Shad White, released the findings of the 2024 audit of Vicksburg Warren School District (VWSD) June 23.

The audit, routinely completed every five years, listed areas of internal control and compliance review findings for VWSD, along with 17 areas of recommended improvement.

The first finding concerned a review of VWSD’s bank and investment reconciliations. The report noted “Bank accounts were not properly reconciled to the general ledger’s cash balance, resulting in a difference totaling ($2,446,212).”

The areas of concern resulting in the deficit were:
• District Maintenance – ($89,953);
• Debt Service – ($444);
• Accounts Payable – ($34,387); and
• Capital Projects – ($2,321,428).

The District’s investment account, totaling $11,296, was not reconciled monthly for fiscal year 2024.

VWSD responded that it has experienced high employee turnover and has modified several financial roles to require a bachelor’s degree in accounting. This was a repeat finding from the 2019 state audit of VWSD. There was no explanation for the $2.3 million deficit in Capital Projects.

The second finding involved the superintendent’s signature on purchase orders and employee contracts, noting an electronic signature was used. The computer system (MUNIS) was unable to identify who was utilizing the electronic signature. The auditor’s office noted that this can result in fraud, loss or misappropriation of funds and recommended VWSD put measures in place to ensure the superintendent’s signatures were original.

In their third finding, the auditor noted the pages of the minutes of the board of trustee meetings were not numbered. VWSD agreed to implement measures to make sure minutes were numbered. This was a repeat finding from the 2019 state audit of VWSD.

The fourth item noted that five funds did not have budgets. They were:

• Fund 2712 (Voc Fed)
• Fund 2901 (J-D-C0)
• Fund 2921 (AED Grant)
• Fund 2900 (NCRS Army)
• Fund 4023 (ED Facil 2010)

Additionally, the school board was noted to have approved a fiscal year 2023-24 budget that resulted in negative balances of three funds (Alternative School Fund 1140, ARP Homeless Fund 2609 and Capitol Projects Fund COP19) totaling $174,606. VWSD responded that it “did not receive grant awards or notification of changes until after the combined and combining budget was presented. The negative fund balances for capital projects and title funds were balances from prior years.”

Several errors regarding travel reimbursement were found. One travel voucher did not have corroborating evidence included in the documentation provided to verify the purpose of the travel; one travel voucher was not properly signed or approved for payment; one travel advance documentation was not turned in within five working days after the end of the month of travel as required by board policy; and seven travel advances were not approved by the superintendent as required by board policy. In response, VWSD said measures have been implemented to better track employee travel and pledged to review all documents for travel prior to releasing travel advances.

A review of VWSD’s depositories and booster clubs found an open bank account for the Vicksburg High School (VHS) JROTC booster club is under VWSD’s federal tax identification number. This is not allowed by law and resulted in private funds within this bank account not being reported within VWSD’s accounting and financial statements. Officers, financial statements, and minutes were not presented to the principal by Aug. 1, and the signor on the VHS JROTC booster club bank account is an employee of the VWSD.

Failure to present the officers, financial statements, and minutes to the principal by Aug. 1, and ensure employees are not officers on VWSD’s booster clubs is a violation of the district’s board policy. VWSD responded it will ensure controls are put in place for compliance.

Another area found by the state auditor’s office concerned the issuance of Education Enhancement Fund (EEF) procurement cards. According to the Mississippi Department of Education, EEF cards are directly allocated to teachers to purchase authorized classroom supplies, material and equipment. VWSD stated employee turnover in key financial roles has affected the control of this item and procedures will be implemented to bring them into compliance.

The school board was the recipient of a finding concerning nepotism and ethics. The auditor noted that one board member voted on the rehire of a nephew as a certified teacher and one board member voted on the salary scale and budget that included local supplement and their son’s salary as a certified teacher. According to Mississippi law, board members are not allowed to vote concerning recommendations of relatives within the third degree. VWSD said it would increase training for board members to ensure said board member leaves the room when voting.

Violation of purchasing procedures was identified by the state auditor’s office. The review found five vendor purchases totaling $148,213 did not have two quotes as required by law and 128 claims totaling $99,406 were split to circumvent the requirement of obtaining two quotes. Other findings concerning purchasing procedures included

• invoices that were not paid within 45 days
• acceptance of a bid that was not the lowest bid without justification in board minutes
• authorization of payments to be made as emergency purchases that were not authorized by the board
• no evidence of solicitation of bids for custodial services awarded to ABM Industry Groups for $1.85 million
• utilization of open purchase orders exceeding $5,000 when two bids/quotes should be obtained
• payment of maintenance repairs totaling $119,975 that should have been handled by District maintenance employees
• approval of HVAC bid for Star Services totaling $875,044 without evidence of bids from other vendors
• purchases by the Director of Child Nutrition who is not authorized to make purchases
• purchases by the technology director who is not authorized to make those purchases
• acceptance of bids by the maintenance director, who is not bonded as a purchasing agent and did not properly obtain two quotes/bids per school

Again, VWSD cited employee turnover as the reason for these findings and will train financial employees.

During the review of the District’s credit cards, the auditor noted proper approval procedures to procure credit cards and merchant-specific credit cards did not meet state law requirements. Specifically the board must approve credit cards when it is determined that the Small Purchase Procurement Card will not meet the needs of the district. VWSD agreed to terminate all merchant-specific cards and obtain a Small Purchase Procurement Card as required by law.

Another violation of state law identified by the audit cited the electronic ticket sales system implemented by the district, which prohibits taxpayers from purchasing tickets at the gate without additional fees. The audit also found the district paid for MHSAA passes for employees in the amount of $240. The Mississippi Constitution prohibits the school district from using state dollars to compensate the teachers for services rendered which are already covered by their contract, which includes the purchasing of athletic event tickets.

In response, VWSD said it will make tickets available for purchase with cash at the district office every Monday from 11 a.m. to 2 p.m. Tickets will be available for every event held during that week. The athletic department will follow all district and state policies regarding daily cash deposits after ticket sales have concluded. In response to the MHSAA statewide passes, the district will only purchase statewide passes for board members, building-level administrators and coaches. District employees required to be at games will have to purchase a statewide pass through the athletics department.

VWSD was found to be in noncompliance with state law regarding salary scales. Instead of being approved by the board of trustees, the human resources director was making salary determinations for new positions. The audit stated pay scales were based on 2022 salaries, which could result in an underpayment of salaries.

The audit found VWSD 16th Land Section lease revenue was not being properly shared with neighboring school districts for land in a shared township. Again, VWSD cited high employee turnover as the reason. This was a repeat finding from the 2019 audit.

In comparison, the Yazoo City School District received 28 areas with recommendations, Jackson Public School District received 14 recommendations; the Hazlehurst City School District received 11; and Holmes County Consolidated School District received 7 recommendations. The top-rated school district in the state, Pass Christian, received 6; Madison County received 1; Starkville-Oktibbeha received 8; and Senatobia 10.