The Okolona school district had racked up a $1.25 million deficit by the time the state assumed control of it last year.
The district had been operating at a deficit for six of the seven years that Novum Advisory, a private accounting firm, reviewed for the Mississippi Department of Education. An auditor for that firm presented the findings to the state Board of Education on Thursday.
The Mississippi Department of Education is located in the former Central High School at 359 N. West Street in Jackson, Friday, Mar. 11, 2022. Credit: Vickie D. King/Mississippi Today
Okolona schools have also seen declining enrollment but school officials were spending more, particularly on consulting services and travel, said Stephanie Palmertree, co-founder of Novum Advisory, a Madison-based firm. Palmertree also was a longtime top official in the Office of the State Auditor before leaving in 2024 to start Novum.
“The increase is alarming,” Palmertree told state education board members about the district’s spending.
Missing annual financial audits and federal pandemic relief funds — one-time money that the district was using instead as recurring revenue — masked the district’s “profound state of financial disrepair,” Palmertree said.
In October, Okolona district officials informed the state Education Department that they couldn’t make payroll the following month and asked for help.
The state Board of Education voted in November to take over the district. That was the second time the state had to intervene with the district. Okolona went under state control in 2010 for two years for academic issues and financial troubles.
The agency sent Okolona schools $1.5 million in emergency funds, which district officials agreed to repay in $300,000 installments over the next five years, said Kym Wiggins, the state Education Department’s chief operating officer. The first payment is due in June 2027.
The Okolona district enrolled 505 students last school year, a decrease from 547 students in 2020-21. In the same time frame, the district’s per-student spending increased by 83% to about $18,000 a student. In 2023-24, the state average for per-pupil spending was $12,176.
Vice Chairman Matt Mayo during a Mississippi Board of Education meeting on Thursday, Dec. 18, 2025 in Jackson. Credit: Vickie D. King/Mississippi Today
The gap between the district’s expenses and revenue began widening after 2023, Palmertree said. The biggest spending increases were for travel and consulting fees unrelated to student instruction, she said.
“Just like in your own home, what do you cut?” she said. “You cut vacations. You cut things like that before you start cutting your needed services.”
Many of the district’s invoices have “ambiguous descriptions,” Palmertree said. That’s also true for the district’s spending of federal pandemic relief funds, which often require documentation.
The district is working with another firm to get up to speed on missing audits, Palmertree said, and Novum is helping Okolona implement a corrective action plan.
Since taking over Okolona, state education officials have been cracking down on schools with missing financial audits. In March, after state Education Department leaders approved a rule change that ramped up consequences for districts missing audits, officials reported that the number of school districts missing financial audits was down to 32 from 47.
State Board of Education members wondered how many other districts might have similar precarious financial situations that are unknown to agency officials because of the missing audits.
“There are so many questions,” board Vice Chairman Matt Mayo said while board member Ronnie McGehee shook his head in dismay.
