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Tennessee plans to launch a deep dive into Memphis-Shelby County Schools’ finances and administration in mid-July following Republican leaders’ insistence the district should be examined for irregularities amid discussions of a potential state takeover.
The contract for the state-funded forensic audit, which is designed to dig for potential fraud and abuse, is set to begin on July 17, according to documents published by the Tennessee Comptroller’s office. The office concluded a bidding process in early June and is expected to select a firm to perform the audit by the end of the month.
It’s not yet clear how long the audit could run, but the proposed contract would require the auditor to inform the state immediately if it discovers any evidence of fraud.
Rolling audit reports could keep the pressure on Memphis-Shelby County Schools even while lawmakers are in recess for the rest of the year.
Tennessee lawmakers this spring approved a $6 million budget item for the audit as Republican leaders called for a state takeover of the Memphis district.
The takeover legislation ultimately fell apart in the final days of the General Assembly session as Republicans couldn’t come to an agreement on the details of the plan.
But Republicans vowed to revive MSCS intervention legislation next year and say the results of the forensic audit could factor into the renewed effort.
“We’re going to really take a look at the books to see if there is fraud, abuse, or waste,” House Speaker Cameron Sexton, a Republican from Crossville, said earlier this year. “That has been mentioned to us time and time again that might be coming out of the school system.”
Per state law, the district already submits annual financial and compliance audits performed by an external firm, which have on occasion revealed things such as payroll lapses and contract overpayment.
The state audit funding was a significant increase over the $50,000 previously tapped by the Shelby County Commission for an audit earlier this year. The commission authorized the funds after it approved a no-confidence resolution directed at MSCS board members who opposed then-Superintendent Marie Feagins.
The state’s call for bids highlights that the audit should examine potential “fraud, waste, abuse, and any deficiencies” in the district, but it also calls for an evaluation on the “effectiveness and efficiency of MSCS operations” and its legal compliance.
A spokesperson from the Tennessee comptroller’s office declined to reveal which firms were in the running for the bid, or how many had expressed intent, citing a Tennessee law that shields sealed bids until the bidding process is complete.
Melissa Brown is the bureau chief for Chalkbeat Tennessee. Contact Melissa at mbrown@chalkbeat.org.
