Two months after releasing a preliminary audit that uncovered “widespread operational failures” in Memphis-Shelby County Schools (MSCS), the Tennessee Comptroller’s Office on Wednesday released the complete results detailing even more concerns.¶
CliftonLarsonAllen LLP (CLA) conducted the audit, which covered fiscal years 2022 through 2024.¶
"The failures identified in these reports are unacceptable,” Comptroller Jason Mumpower said in a 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.”¶
The Audit Results
The Comptroller’s Office listed a few of the audit’s “most significant findings,” including allegations that the district awarded $48.4 million in custodial service contracts to one vendor, even though the evaluation committee had recommended several other companies. The contract was later terminated because of poor performance. Afterward, the district referred whistleblower complaints about the bidding process to the FBI. However, CLA could not confirm the details of those allegations or determine whether the FBI took any action.¶
The audit also found “numerous concerns” with project management contracts with Allworld Production Management, including contract awards, vendor involvement in bidding documents, and even Allworld employees participating in MSCS employment interviews for positions that could influence procurement contracts and outcomes.¶
The last of the audit’s key findings concerns $3.1 million in payments to Mid-South Renovations, for which auditors say evidence suggested a conflict of interest involving the district’s former director of facilities and maintenance. The audit also identified roughly $400,000 in work that was performed improperly and another $250,000 that was paid for but never completed. Some of those expenses were paid for with federal grant money.¶
"This is not a report about isolated mistakes. It documents systemic failures throughout the organization's governance, procurement, contracting, financial management, and recordkeeping,” Mumpower said in the release. “While many dedicated teachers and employees serve students every day, the administrative failures identified in these reports demanded an independent review and now require sustained corrective action."¶
What Led to This
The audit is part of a broader state intervention in the district that has its roots in last year’s decision to fire former superintendent Marie Feagins, less than a year into her tenure. The school district has also received blowback for low academic performance.¶
This year, the General Assembly created a state oversight board consisting of nine members with sweeping authority to make changes, including the power to hire or fire board members or the superintendent.¶
The future of that oversight board is in limbo following a temporary injunction issued by U.S. District Judge Waverly D. Crenshaw after MSCS filed an 80-page lawsuit. The district argues that state intervention was unconstitutional.¶
