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
On this day in 1865
Dec. 24, 1865
Months after the fall of the Confederacy and the end of slavery, a half dozen veterans of the Confederate Army formed a private social club in Pulaski, Tennessee, called the Ku Klux Klan. The KKK soon became a terrorist organization, brutalizing and killing Black Americans, immigrants, sympathetic whites and others.
While the first wave of the KKK operated in the South through the 1870s, the second wave spread throughout the U.S., adding Catholics, Jews and others to their enemies’ list. Membership rose to 4 million or so.
The KKK returned again in the 1950s and 1960s, this time in opposition to the civil rights movement. Despite the history of violence by this organization, the federal government has yet to declare the KKK a terrorist organization.
This article first appeared on Mississippi Today and is republished here under a Creative Commons license.
Mississippi Today
An old drug charge sent her to prison despite a life transformation. Now Georgia Sloan is home
CANTON – Georgia Sloan is home, back from a potentially life-derailing stint in prison that she was determined to instead make meaningful.
She hadn’t used drugs in three years and she had a life waiting for her outside the Mississippi Correctional Institute for Women in Pearl: a daughter she was trying to reunite with, a sick mother and a career where she found purpose.
During 10 months of incarceration, Sloan, who spent over half of her life using drugs, took classes, read her Bible and helped other women. Her drug possession charge was parole eligible, and the Parole Board approved her for early release.
At the end of October, she left the prison and returned to Madison County. The next day she was back at work at Musee, a Canton-based bath products company that employs formerly incarcerated women like Sloan and others in the community facing difficulties. She first started working at the company in 2021.
“This side of life is so beautiful. I would literally hold on to my promise every single minute of the day while I was in (prison),” Sloan told Mississippi Today in December.
Next year, she is moving into a home in central Mississippi, closer to work and her new support system. Sloan plans to bring her daughter and mother to live with her. Sloan is hopeful of regaining custody of her child, who has been cared for by her aunt on a temporary basis.
“This is my area now,” she said. “This has become my family, my life. This is where I want my child to grow up. This is where I want to make my life because this is my life.”
Additionally, Sloan is taking other steps to readjust to life after prison: getting her driver’s license for the first time in over a decade, checking in monthly with her parole officer and paying court-ordered fines and restitution.
In December 2023, Sloan went to court in Columbus for an old drug possession charge from when she was still using drugs.
Sloan thought the judge would see how much she had turned her life around through Crossroads Ministries, a nonprofit women’s reentry center she entered in 2021, and Musee. Her boss Leisha Pickering who drove her to court and spoke as a witness on Sloan’s behalf, thought the judge would order house arrest or time served.
Instead, Circuit Judge James Kitchens sentenced her to eight years with four years suspended and probation.
He seemed doubtful about her transformation, saying she didn’t have a “contrite heart.” By choosing to sell drugs, Kitchens said she was “(making) other people addicts,” according to a transcript of the Dec. 4, 2023, hearing.
“I felt like my life literally crumbled before my eyes,” Sloan said about her return to prison. “Everything I had worked so hard for, it felt like it had been snatched from me.”
She was taken from the courtroom to the Lowndes County Detention Center, where she spent two months before her transfer to the women’s prison in Rankin County.
Sloan found the county jail more difficult because there was no separation between everyone there. But the prison had its own challenges, such as violence between inmates and access to drugs, which would have threatened her sobriety.
She kept busy by taking classes, which helped her set a goal to take college courses one day with a focus on business. Visits, phone calls and letters from family members and staff from Musee and Crossroads were her lifeline.
“I did not let prison break me, I rose above it, and I got to help restore other ladies,” Sloan said.
She also helped several women in the prison get to Crossroads – the same program that helped her and others at Musee.
Sloan credits a long-term commitment to Crossroads and Musee for turning her life around – the places where she said someone believed in her and took a chance on her.
Pickering, Musee’s CEO, said in the three years she’s known Sloan, she’s watched her grow and become a light for others.
The bath and lifestyle company has employed over 300 formerly incarcerated women in the past dozen years, but Pickering said not everyone has had the same support, advocacy and transformation as Sloan. Regardless, Pickering believes each person is worth fighting for.
When Sloan isn’t traveling for work to craft markets with Pickering, she shares an office with her Musee colleague Julie Crutcher, who is also formerly incarcerated and a graduate of Crossroads’ programs. She also considers Crutcher a close friend and mentor.
Sloan has traveled to Columbus to see her mother and daughter whom she spent Thanksgiving with. She will see them again for Christmas and celebrate her daughter’s 12th birthday the day after.
Her involvement with the criminal justice system has made Sloan want to advocate for prison reform to help others and be an inspiration to others.
“I never knew what I was capable of,” Sloan said. “I never knew how much people truly, genuinely love me and love being around me. I never knew how much I could have and how much I could offer the world.”
This article first appeared on Mississippi Today and is republished here under a Creative Commons license.
Mississippi Today
On this day in 1946
Dec. 23, 1946
University of Tennessee refused to play a basketball game with Duquesne University, because they had a Black player, Chuck Cooper. Despite their refusal, the all-American player and U.S. Navy veteran went on to become the first Black player to participate in a college basketball game south of the Mason-Dixon line. Cooper became the first Black player ever drafted in the NBA — drafted by the Boston Celtics. He went on to be admitted to the Basketball Hall of Fame.
This article first appeared on Mississippi Today and is republished here under a Creative Commons license.
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