Mississippi Today
JSU Development Foundation under scrutiny for alleged ‘unintended’ use of restricted dollars as presidential selection looms
Concerns about poor recordkeeping, inadequate accountability and the possible “unintended” use of restricted dollars led a member of the Jackson State University Development Foundation board to quietly resign earlier this year.
In his June 23 resignation letter, Brian Johnson, a 2009 Jackson State graduate who had served on the board for six years, wrote that he was stepping down after the board failed to pass his motion for a forensic audit.
Johnson was alarmed by internal presentations that he wrote showed the cash-strapped foundation using donor-restricted dollars to pay for its general obligations. But the foundation’s recent annual audits, Johnson wrote, had no discussion of the potentially improper spending.
“As a business professional in the financial services industry, I can’t seem to comprehend how the JSUDF Board of Directors received two financial reports over the last two years from two different JSU Division of Institutional Advancement comptrollers indicating the unintended use of restricted/designated funds, but the Foundation’s CPA audited financial statements have no note or mention of this information,” he wrote.
When contacted by Mississippi Today, Johnson would not comment for this story.
Johnson’s resignation letter is part of a cache of internal foundation documents that was obtained by Mississippi Today as Jackson State is poised to receive a new president. Last week, the Institutions of Higher Learning governing board for Mississippi’s public universities held a special-called meeting to discuss the imminent hire for just 16 minutes.
Taken together, the documents raise questions at the core of the foundation’s fiscal health. One document showed the foundation lacking about $7.6 million in “cash on hand to cover fund balances” and its operating budget, on average, bleeding at least $100,000 every year since 2012. Another, an internal audit that Jackson State completed in late September, determined the foundation was commingling in one account its operating and donor-restricted dollars for alumni, athletics and annual scholarships.
Brian Mittendorf, an Ohio State University accounting professor who reviewed the documents for Mississippi Today, said it wasn’t clear how the foundation has enough liquidity, or cash-on-hand, to meet its obligations, including scholarships and financial support for university athletics.
“There’s this consistent nagging issue which is that a substantial amount of their assets are restricted, though the exact amount is somewhat unclear,” he said.
But Mittendorf said he was only able to reach that conclusion — one of the concerns that led Johnson to resign — after reading “between the lines” of the foundation’s audit. He didn’t understand why the foundation’s audits are not drawing attention to the existential financial situation it appears to be facing.
“Somewhat surprisingly, they aren’t shouting about that from the rooftops in the financial statement,” Mittendorf said.
In an email, an IHL spokesperson wrote that “IHL does not govern the JSU Development Foundation, so questions about the foundation’s assets should be addressed to the foundation.” But IHL’s bylaws do permit the board to exercise a certain amount of oversight over the university-affiliated foundations, such as giving prior approval if a president wishes to sever ties with the foundation.
The foundation chair, Guyna “Gee” Johnson, a managing director of global fund ratings at S&P who has led the foundation since 2021, asked Mississippi Today to email her questions for this article but did not respond to repeated requests for comment by press time.
In a sit-down interview with JSUTV earlier this year, Gee said that “one of the things the board would like to do is to bring more attention to what we’re doing so people feel safe and they trust that we are being good stewards over their money so that they can continue to help our students grow.”
$7 million cash on-hand deficit?
The development foundation was founded in the 1960s to financially support Jackson State. It has been in hot water in recent years after an independent audit that IHL called for found tens of thousands of dollars in questionable credit card spending in 2014, leading the foundation to cancel its credit cards.
Johnson got on the board in 2017, a year after that independent audit was made public by the Clarion Ledger. But internally, the foundation was facing even more challenges than Johnson knew, he wrote in his resignation letter.
“It was then I learned the Foundation was behind on 990’s, facing legal issues due to past Foundation ventures/contracts and not having completed audited financial statements for the two prior years,” he wrote.
The board proceeded to work together to resolve the issues, Johnson wrote. In 2019, a resolution was introduced to acknowledge that the board had borrowed funds from temporarily restricted accounts, as well as its permanently restricted endowment, due to “having insufficient unrestricted operating dollars.”
The foundation, according to the resolution, intended to repay the “interfund debt,” which at the time totaled about $1.8 million. It’s unclear from the document Mississippi Today received if the foundation adopted the resolution.
And last year, the foundation finally executed the sale of One University Place, a mixed-use apartment complex across the street from Jackson State’s campus that was draining the foundation’s bank accounts, to the university for $6.9 million.
But it appears the sale wasn’t enough to get the foundation in the clear, according to the foundation’s 2021 audit and two internal PowerPoints presented earlier this year by Keilani Vanish and Sophia Williams, comptrollers for the foundation.
As of May 18, the date of the most recent presentation, the foundation’s restricted fund balances, which cover its designated accounts, totaled $11.6 million. But the foundation had just under $4 million in its operating accounts, leaving a roughly $7 million deficit in “cash on hand to cover fund balances.” A presentation in February showed a similar situation.
That’s when Johnson, who served on the finance committee, began to wonder why that information wasn’t included in the foundation’s audited financial statements, according to his letter.
The foundation should be communicating the difference between those documents to board members, Mittendorf said.
“The concerning part is if someone on a board is unaware of why those things deviate,” he said.
Mittendorf reviewed the internal presentations and the foundation’s 2021 audit, the most recent publicly available. Both documents, he said, were confusing for him to follow.
David Ewing, the accountant who oversaw the audit, said he couldn’t answer any questions about the foundation, because the university is “pretty strict” about the information it gives out and he didn’t want to lose a client.
Though Mittendorf didn’t go so far as to question whether the 2021 audit was accurate, he noted that it appeared to contradict itself. On page 3, the audit shows the foundation has about $33 million net assets “with donor restrictions, but on page 22, in a section titled “liquidity and availability,” the audit claims that the foundation has “no donor restricted net assets.”
That same section, Mittendorf pointed out, claims the foundation has access to about $35 million in “financial assets available to meet cash needs for general expenditures within one year.” But that doesn’t add up, he said, considering the audit also states the foundation has just under $42 million in total financial assets at year-end, with over $37 million of that in the restricted endowment.
Meanwhile, the foundation is holding a substantial amount of debt. In 2021, the foundation extended its credit line with Merrill Lynch from $2 million to $6.9 million, “secured with certain investments accounts held by Merrill Lynch in the name of the Foundation.” The balance was $5.9 million, according to the May comptroller presentation.
At BankPlus, the foundation has a $3 million credit line but the most recent balance is unclear.
A one-page internal audit
Johnson wasn’t the only one with questions. On June 1, an ex-officio board member emailed Gee and the board because there were rumors in the community about the presentation that allegedly showed the foundation spending restricted dollars.
When Gee replied-all on June 9, she wrote that if the community had access to that presentation, which was prepared for “various internal management or other analytical purposes” and was not an official financial position, then an “extremely serious breach of confidentiality” had occurred.
“The matters you mention in your email have been things that JSUDF boards, University Presidents and University CFOs have been aware of for at least 15+ years, and we have been addressing directly through corrective measures,” Gee wrote. “As we have University turnover, the board chair’s transition policy is to immediately request a meeting to properly provide an official financial update, provide and (sic) overview of the Foundation and align our goals with the new administration’s strategic plan.”
A week later, a similar concern about the “potential misuse of donated funds” led Jackson State to start conducting an internal audit of the foundation that was finalized in September, according to a copy.
It was only one page.
Though the university’s internal auditor, Christopher Thomas, wrote in an email that IHL Commissioner Alfred Rankins requested the internal audit, an IHL spokesperson wrote in an email that Elayne Hayes-Anthony called for it.
Hayes-Anthony has been the university’s temporary acting president since Thomas Hudson resigned earlier this year for reasons that remain unclear. She holds one of seven ex-officio spots on the board, the one reserved for the university president.
“Commissioner Rankins did not call for an internal audit of the foundation,” Kim Gallaspy, IHL’s interim communications director, wrote in an email to Mississippi Today. “Dr. Elayne Hayes-Anthony initiated the process by expressing concerns to the Board of Trustees about the use of JSU Development Foundation funds. Dr. Anthony was advised to exercise her authority to have her concerns investigated by utilizing the university’s internal audit staff to review any Foundation books, records or accounts needed to monitor and verify proper use of donated funds.”
Thomas wrote that he did not find any “current evidence” of misused donor funds, but that the foundation’s bank accounts only had $4.4 million as of Aug. 31 while the “designated accounts” totaled $11.8 million, a finding that correlates with the internal presentations.
“While the Development Foundation liquid funds are not adequate to cover the Designed Accounts, this does not represent the financial position of the Development Foundation,” he wrote. “The Foundation holds a multitude of assets that can be utilized to meet its financial obligation to the University.”
Though Thomas did not specify what those assets are, he did identify six areas where the foundation could improve its internal controls. Specifically, he recommended the foundation should monitor its budgets “based on actual revenue throughout the fiscal year to reduce overspending.”
He also recommended the foundation establish “separate bank accounts” for the operating budget — called “the Excellence Fund” — and the donor gifts, which were commingled.
Mittendorf said foundations should keep records in a way that prevents concerns about funds getting mixed up.
“When you have donor designed and donor restricted gifts, you want impeccable record keeping that segregates the funds,” he said.
It’s unclear if the foundation has done that.
This article first appeared on Mississippi Today and is republished here under a Creative Commons license.
Mississippi Today
Mississippi Today’s NewsMatch Campaign is Here: Support Journalism that Strengthens Mississippi
High-quality journalism like ours depends on reader support; without it, we simply couldn’t exist. That’s why we’re proud to join the NewsMatch movement, a national initiative aimed at raising $50 million for nonprofit newsrooms that serve communities like ours here in Mississippi, where access to reliable information has often been limited.
In a time when trusted journalists and media sources are disappearing, we believe the stakes couldn’t be higher. Without on-the-ground, trustworthy reporting, civic engagement suffers, accountability falters and corruption often goes unaddressed. But it doesn’t have to be this way.
Here at Mississippi Today we act as watchdogs, holding those in power accountable, and as storytellers, giving a platform to voices that have been ignored for too long. And we’re committed to keeping our stories free for everyone because information should be accessible when it’s needed most.
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This article first appeared on Mississippi Today and is republished here under a Creative Commons license.
Mississippi Today
Hinds County loses fight over control of jail
The Hinds County sheriff and Board of Supervisors have lost an appeal to prevent control of its jail by a court-appointed receiver and an injunction that orders the county to address unconstitutional conditions in the facility.
Two members from a three-judge panel of the 5th U.S. Circuit Court of Appeals agreed with decisions by U.S. District Judge Carlton Reeves to appoint a receiver to oversee day-to-day jail operations and keep parts of a previous consent decree in place to fix constitutional violations, including a failure to protect detainees from harm.
However, the appeals court called the new injunction “overly broad” in one area and is asking Reeves to reevaluate the scope of the receivership.
The injunction retained provisions relating to sexual assault, but the appeals court found the provisions were tied to general risk of violence at the jail, rather than specific concerns about the Prison Rape Elimination Act. The court reversed those points of the injunction and remanded them to the district court so the provisions can be removed.
The court also found that the receiver should not have authority over budgeting and staff salaries for the Raymond Detention Center, which could be seen as “federal intrusion into RDC’s budget” – especially if the receivership has no end date.
Hinds County Board of Supervisors President Robert Graham was not immediately available for comment Friday. Sheriff Tyree Jones declined to comment because he has not yet read the entire court opinion.
In 2016, the Department of Justice sued Hinds County alleging a pattern or practice of unconstitutional conditions in four of its detention facilities. The county and DOJ entered a consent decree with stipulated changes to make for the jail system, which holds people facing trial.
“But the decree did not resolve the dispute; to the contrary, a yearslong battle ensued in the district court as to whether and to what extent the County was complying with the consent decree,” the appeals court wrote.
This prompted Reeves to hold the county in contempt of court twice in 2022.
The county argued it was doing its best to comply with the consent decree and spending millions to fix the jail. One of the solutions they offered was building a new jail, which is now under construction in Jackson.
The county had a chance to further prove itself during three weeks of hearings held in February 2022. Focuses included the death of seven detainees in 2021 from assaults and suicide and issues with staffing, contraband, old infrastructure and use of force.
Seeing partial compliance by the county, in April 2022 Reeves dismissed the consent decree and issued a new, shorter injunction focused on the jail and removed some provisions from the decree.
But Reeves didn’t see improvement from there. In July 2022, he ordered receivership and wrote that it was needed because of an ongoing risk of unconstitutional harm to jail detainees and staff.
The county pushed back against federal oversight and filed an appeal, arguing that there isn’t sufficient evidence to show that there are current and ongoing constitutional violations at the jail and that the county has acted with deliberate indifference.
Days before the appointed receiver was set to take control of the jail at the beginning of 2023, the 5th Circuit Court ordered a stay to halt that receiver’s work. The new injunction ordered by Reeves was also stayed, and a three-person jail monitoring team that had been in place for years also was ordered to stop work.
This article first appeared on Mississippi Today and is republished here under a Creative Commons license.
Mississippi Today
2 out of 5 child care teachers make so little they need public assistance tosupport their families
This story about child care wages was produced by The Hechinger Report, a nonprofit,
independent news organization focused on inequality and innovation in education. Sign up for the Hechinger’s early childhood newsletter.
Caring for children during their first few years is a complex and critical job: A child’s
brain develops more in the first five years than at any other point in life. Yet in America,
individuals engaged in this crucial role are paid less than animal caretakers and
dressing room attendants.
That’s a major finding of one of two new reports on the dismal treatment of child care
workers. Together, the reports offer a distressing picture of how child care staff are
faring economically, including the troubling changes low wages have caused to the
workforce.
Early childhood workers nationally earn a median wage of $13.07 per hour, resulting in
poverty-level earnings for 13 percent of such educators, according to the first report, the
Early Childhood Workforce Index 2024. Released earlier this month by the Center for
the Study of Child Care Employment at the University of California, Berkeley, the annual
report also found:
? 43 percent of families of early educators rely on public assistance like
food stamps and Medicaid.
? Pay inequity exists within these low wages: Black early childhood
educators earn about $8,000 less per year than their white peers. The
same pay gap exists between early educators who work with infants and
toddlers and those who work with preschoolers, who have more
opportunities to work in school districts that pay higher wages.
? Wages for early educators are rising more slowly than wages in other
industries, including fast food and retail.
In part due to these conditions, the industry is losing some of its highest-educated
workers, according to a second new report, by Chris M. Herbst, a professor at Arizona
State University’s School of Public Affairs. That study compares the pay of child care
workers with that of workers in other lower-income professions, including cooks and
retail workers; it finds child care workers are the tenth lowest-paid occupation out of
around 750 in the economy. The report also looks at the ‘relative quality’ of child care
staff, as defined by math and literacy scores and education level. Higher-educated
workers, Herbst suggests, are being siphoned off by higher-paying jobs.
That’s led to a “bit of a death spiral” in terms of how child care work is perceived, and
contributes to the persistent low wages, he said in an interview. Some additional
findings from Herbst’s study:
? Higher-educated women increasingly find employment in the child care
industry to be less attractive. The share of workers in the child care
industry with a bachelor’s degree barely budged over the past few
decades, increasing by only 0.3 percent. In contrast, the share of those in
the industry who have 12 years of schooling but no high school degree,
quadrupled.
? Median numeracy and literacy scores for female child care workers
(who are the majority of the industry staff) fall at the 35 th and 36 th
percentiles respectively, compared to all female workers. Improving these
scores is important, Herbst says, considering the importance of education
in the early years, when children experience rapid brain development.
This doesn’t mean child care staff with lower education levels can’t be good early
educators. Patience, communication skills and a commitment to working with young
children also matter greatly, Herbst writes. However, higher education levels may mean
staff have a stronger background not only in English and math but also in topics like
behavior modification and special education, which are sometimes left out of
certification programs for child care teachers.
You can read Herbst’s full report here, and the 2024 workforce index here.
This article first appeared on Mississippi Today and is republished here under a Creative Commons license.
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