Preliminary Audit of Memphis-Shelby County Schools Finds Widespread Waste and Fraud

Jason Mumpower, Tennessee’s Comptroller of the Treasury, delivers remarks at a press conference on April 1. (Photo Courtesy of Tennessee Comptroller’s Office)

Jason Mumpower, Tennessee’s Comptroller of the Treasury, and other state officials delivered sharp, unambiguous remarks during a press conference discussing the state’s long-awaited audit of the Memphis-Shelby County Schools (MSCS) on Wednesday morning.

"In my opinion, as comptroller, this is the worst management of any organization I have seen in my career. I would say, in fact, that it is unprecedented for an organization of this scope and size," said Jason Mumpower

The Comptroller’s Office published a press release ahead of the press conference in which it divulged a host of issues found so far during its audit of the Memphis-Shelby County School system. Mumpower said the audit is only about 25 percent complete and that it might even be done by now had his office “had the necessary cooperation from the Memphis-Shelby County School System.”

"I think what this audit shows is that the Memphis-Shelby County school system is about as organized as a $5 bin at the Walmart,” said Senator Brent Taylor, R-Memphis.

The Findings

In the audit, Mumpower and other officials revealed nearly 175 deficiencies involving a wide range of “widespread operational failures” in the MSCS system, including:

·       More than $1.1 million in waste and abuse, as well as more than $1.7 million in spending not in compliance with district policies and procedures.

·       Nearly $2 million in disbursements, wire transfers, bank statements, and payroll and travel stipends that have no record-keeping or oversight.

·       CliftonLarsonAllen LLP (CLA) has been unable to locate at least 40 percent of the I9 verification forms it tested.

·       44 deficiencies related to internal controls and 51 deficiencies related to systems and cybersecurity.

·       Only 6 percent of contracted vendors had addresses, with most only having P.O. boxes

·       Multiple contracts had no oversight, no record of purchase orders, unsupported changes for meals and travel expenses, billing for unrealistic work days, and double payments for vacations

·       "I just want to say this is one of the worst audit reports that I've seen in my almost 50 years in state government. I think it demonstrates that, from the school board to the school management, there's lots of problems, and it's like people don't care about any rules or any accounting procedures that should be done,” said Lt. Gov. Randy McNally, R-Oak Ridge.

District Response

The night before the press conference, MSCS published a press release announcing the hiring of Dr. Roderick Richmond as its permanent Superintendent.

The move was a reversal of last month’s decision to return him to interim status after naming Richmond superintendent in February.

The board did make changes to Richmond’s contract that included provisions allowing his firing without pay if he poorly manages the district’s finances or fails to successfully address issues identified in the state audit.

Richmond issued a statement on Wednesday, promising to review the audit and respond to its findings.

“If any wrongdoing is identified, we will join the state in holding the responsible individual or individuals accountable so that the law-abiding employees within this organization can continue the important work of educating our community’s children,” said Richmond in a statement. “We also recognize that when systems or processes fail, whether past or present, trust is damaged. It is now our responsibility to repair that trust.”

Possible State Intervention

Richmond also urged lawmakers not to move forward with legislation to create a 9-member board of managers to oversee the district. This board would largely relegate school board members and the superintendent to advisory roles, but the Senate has yet to calendar it for discussion.

Both the board of managers’ proposal and the audit followed widespread criticism of the Memphis-Shelby County School Board’s decision last year to fire former Superintendent Marie Feagins after less than one year in the post. The district has also faced criticism of academic underperformance, though the number of schools receiving an A letter grade increased by more than 22 percent from 2024 to 2025, according to the Department of Education.

Last month, the Memphis-Shelby County School Board and other elected leaders unveiled a plan to stave off state intervention that included benchmarks for academic, fiscal, and operational improvements, as well as the establishment of a new Intergovernmental Transformation Council.

The full 329-page preliminary audit is available here.