By Maria Maxham
A Dec. 14 press release from the Mississippi Office of the State Auditor, Shad White, listed problems with the annual audit of the Holmes County School Department, where District 209's new superintendent, James Henderson, worked just prior to making the move to Illinois.
The audit was "for the year ended June 30, 2020," which covered the time during which Henderson was employed by the Holmes County Consolidated School District.
In the release, White said, "This audit reveals widespread problems. The public school students of Holmes County and the taxpayers are the victims here. As a product of public schools myself, my office remains committed to uncovering and stopping this sort of misspending."
Logan Reeves, media relations spokesperson for the Mississippi Office of the State Auditor, spoke to the Review on Dec. 21 about the audit. Reeves said the very fact that the auditor's office sent out a press release is significant.
"These are really bad business practices," said Reeves. "Comparatively and objectively, it's bad." He added these are "not routine findings."
The press release listed what the auditors considered "notable findings," including the following:
- The district paying more than $4,200 for a party to celebrate passage of a bond issue ultimately not passed by voters in Holmes County. The party was described as a celebration for parents, an "adults only" event to which people were invited to bring their own alcoholic beverage of choice.
- Meeting minutes revealed that the board voted to give Henderson a salary of $160,000. However, he was paid $170,000 annually and reimbursed for relocation expenses in excess of legal limits.
- Payments for purchases totaling $14,000 were made to companies owned by Henderson's relatives without proper disclosure to the board. This matter will be further investigated by the Mississippi Ethics Commission.
On Dec. 15, the Review spoke about the audit with Henderson.
The 'BYOB' party
In regard to the $4,200 party, Henderson said the party was in "celebration" of the passage of a bond issue. This was an $18.4 million bond issue to rebuild three schools and implement necessary infrastructure repairs, put to referendum and ultimately not passed during the election on Nov. 5, 2019.
The party was on Nov. 2. Henderson later said it said it was a "get-out-the-vote" celebration, and an additional community engagement movie night for students was provided as well. The flyer itself says it's an event "Celebrating Passage of the 2019 School Bond Referendum."
The $4,200 mentioned in the audit, Henderson said, was spent on food for the community. Half of the $4,200 was paid with funds raised by the community and half was paid for by the district.
The audit report mentioned only the total amount, however, calling it a "misappropriation of public funds" due to "inadequate controls surrounding the district's expenses."
It was, suggested the report, the responsibility of the superintendent, since, according to the Mississippi Public School Accountability Standards, the "School Board assigns all executive and administrative duties to the Superintendent, who is properly licensed and chosen in the matter prescribed by law."
Henderson said he was bothered by the phrase "bring your own bottle," which was how the state auditor, he said, described the event.
"And it's how they painted that," Henderson said in an interview. "And this was not the news reporters in Mississippi; this was the state auditor. You know, and so yes, I had a problem with that."
"BYOB was not on the flyer," Henderson said emphatically. "We did create a flyer, but we did not have 'bring your own bottle.'
He sent the Review a copy of the flyer. It reads, "Bring lawn chairs and your preferred beverage."
In a Dec. 15 Facebook post, Shad White, the Mississippi state auditor, said the audit "showed the administration of a poor school district spent thousands on a BYOY 'adults only' party." And in an interview with the Review when he first got the position in D209, Henderson himself said Holmes County is the "poorest county in the poorest state in America."
Rev. Anthony Anderson, president of the Holmes County Consolidated School District, told the Review on Dec. 21 that the board never approved anything for purchase or any amount to be spent in regard to the party. They also never approved the flyer, Anderson said.
"Henderson informed the board about the celebration," Anderson said.
Contract amount disparity
Henderson said his contract was in the amount of $170,000 for both years he was employed by the district, and he had no explanation for why the board voted on $160,000 but the contract was in a different amount. He provided the Review with a photocopy of his contract showing the $170,000 salary.
The auditor's report recommended that the school district ensure all salaries are paid according to contracts approved by the board. Additionally, the state audit report recommends that Henderson repay the district $20,000 within 30 days for the additional amount he received that was never approved by the board.
Henderson said, however, that since his contract was in the amount of $170,000, he did nothing wrong and there is nothing for him to repay to the district.
According to Reeves, "It's a great question" why meeting minutes showed one amount and the contract another. "Boards and commissions speak through their minutes," Reeves said. "For whatever reason, the contract was different. As far as the audit was concerned, the minutes said something and the contract something else. There is very clearly a problem with the business practices."
Anderson, however, said that during a meeting, a motion was made for a contract in the amount of $160,000 for Henderson's salary. Holmes County School Board attorneys, who had been in negotiation with Henderson over the final amount, brought a new salary back to the board. That final number was voted on in closed session.
Anderson acknowledged that the minutes from the closed session were included in the minutes received by state auditors. "But maybe they were on separate pages," Anderson said. "Maybe they overlooked something."
Henderson and/or the board were also asked to reimburse the district for $8,000 in moving expenses that he was overpaid by the district, which puts a $1,000 cap on moving expenses. He was given $9,000.
In the audit report, the district referred to a 2018 attorney general opinion stating that an agency can pay moving expenses "as long as the original contract of employment included those expenses as part of the compensation package." The district pointed out that Henderson's contract specifically provided for $9,000 in expenses to move to the district.
State auditors, however, said that applies only to state employees and not to the district's superintendent.
Anderson said the contract negotiation was handled by district attorney Ben Piazza. "Maybe he wasn't paying attention," Anderson said. "We were given the contract, and we voted to approve it."
Contracts given to family members
Auditors noted that Henderson's relatives "were not disclosed on his related party questionnaire or within the District's Board minutes." District purchases totaling $8,000 were made to Henderson's sister's catering business, and $6,000 to his brother-in-law's charter bus services.
"Their relationship was not disclosed to the Board," reads the audit report, with the matter being turned over to the Mississippi Department of Ethics for review.
In its official response to this finding, the district said it "acknowledges this finding and will implement procedures to ensure that compliance is met on a timely basis." Additional training will be provided to board and staff members on nepotism and ethics.
When the Review asked Henderson if contracts had been awarded to family members, he said, "That is true. That is true."
But he added that there are only two restaurants in Holmes County, Mississippi. "It's a small city … so everybody knows everybody." His sister's restaurant, which provided monthly meals for the board meetings, was one of the two restaurants in town.
Henderson said he takes issue with the audit saying the board didn't know it was his sister's business.
"Everyone knows the Henderson family," he said. "Because we're the second largest family in the area."
Additionally, said Henderson, "The president of the board told the auditors, 'Oh no, we all know this family. We know his parents and his siblings.' Yet, [the auditors] published what they published."
Anderson expressed a similar sentiment. "Everybody knows everybody in Holmes County. We don't meet strangers," Anderson said in an interview.
Anderson said during lengthy work sessions, it wasn't uncommon for the board to order food. Usually, he said, it had been Subway sandwiches.
When Henderson became superintendent, he brought in some free food and asked the board what they thought of it.
"We liked it fine," said Anderson, at which point Henderson revealed it was food from his sister's restaurant.
"Henderson said he can't just eat anyone's cooking," Anderson said. So arrangements were made to order food from his sister's place for future meetings.
The district's official response, provided on the final audit report, states that, "The District acknowledges this finding and will implement procedures to ensure that compliance is met on a timely basis." Additionally, nepotism and ethics statute training for the board and financial staff will take place.
The full auditor's report is available online at tinyurl.com/y74v7o3c.
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