April 20, 2017
JACKSON, Miss – The Mississippi Department of Education (MDE) released today the results of a fund-level financial audit and a compliance audit of selected federal programs for FY 2015-16. The audits found significant deficiencies and material weaknesses in the MDE’s program administration and accounting practices during 2015-16.
The audits cited nine findings that centered on the MDE’s lack of internal controls and monitoring procedures. One of the findings cited the accounting department’s lack of preparedness for the audit. Though the audits found deficient accounting practices, all state and federal money was accounted for.
“The external audit findings confirm the results of the internal investigation the MDE conducted immediately following the discovery of mismanagement of 21st Century funds in August 2016,” said Dr. Carey Wright, state superintendent of education. “We have already taken significant actions to correct the problems cited in the audits, and are continuing to implement measures to ensure that all state and federal funds are managed with fidelity.”
The Office of the State Auditor (OSA) directed the MDE to contract with an external firm to conduct both audits, which are required annual audits. In previous years, the OSA conducted the audits, but legislation passed in 2016 barred state agencies from charging each other fees. The national accounting firm CliftonLarsonAllen (CLA) conducted both audits.
The financial audit is part of the state’s Comprehensive Annual Financial Report (CAFR). The OSA directed the MDE to produce a fund-level financial audit for FY 2015-16, which is a deeper audit than the OSA had ever previously conducted of the MDE.
The OSA expanded the scope of the MDE’s annual compliance audit of selected federal programs to include the 21stCentury Learning Center program, which the MDE discovered in August 2016 had been mismanaged by three former employees.
“We have taken swift action to remedy all deficiencies, including making key personnel changes to ensure strong oversight and to raise the level of accountability,” Wright said.
Among the corrective actions the MDE has taken:
- Hired new chief operations officer with a strong financial background
- Started Accounting Department reorganization
- Formed partnership with the Mississippi Department of Finance and Administration (DFA) and contracted with an outside consultant to revise and align MDE Policies and Procedures with the Mississippi Accountability System for Government Information and Collaboration (MAGIC)
- Developed executive-level approval measures and multi-level review and reconciliation process for all grant activity
- Provided grants management professional development to staff
The next steps in the correction action plan are:
- Hire new accounting director
- Hire a compliance manager
- Revise annual award documentation and notification to subrecipients to meet Uniform Grant Guidelines
- Write internal protocols for electronic document retention
The next phase of the audit process will be a comprehensive audit of federal programs scheduled for May. This will include a cyclical U.S. Department of Education fiscal review and a forensic audit led by the Office of the State Auditor.
“We are grateful to have such a thorough review of our federal programs from different perspectives because it will provide the most comprehensive and transparent assessment,” Wright said. “We want to be absolutely certain there are no outstanding issues and that the corrective actions we put in place will resolve the problems we found in our system and prevent future fiscal errors. The MDE is committed to serving schools, families and taxpayers with integrity and takes seriously the trust and accountability expected of a state agency.”
Patrice Guilfoyle, APR
Director of Communications
Jean Cook, APR