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
House Chairman kills bill aimed at building Jackson casino, says votes weren’t there
House Chairman kills bill aimed at building Jackson casino, says votes weren’t there
A House chairman killed a proposal aimed at attracting developers to build a resort and casino in the city of Jackson moments before the full chamber was set to vote on it.
House Ways and Means Chairman Trey Lamar, R-Senatobia, made a successful motion to table House Bill 1879, as its sponsor, Rep. Chris Bell, D-Jackson, was answering questions from lawmakers concerned a casino in Jackson would bring unwanted competition to casinos in their districts.
“We didn’t have the votes,” Lamar said. “We felt like it was worth a conversation. Last year it got brought up in committee and didn’t get brought out of committee. This year it made it out of committee and got brought out to the floor,” Lamar said. “Anytime private investors are willing to invest hundreds of millions in downtown Jackson, we think that’s worthy of a conversation. That’s what happened today.”
Tabling the bill caused it to die with a Wednesday deadline.
A dejected Bell walked away after and declined to speak with reporters. Earlier Wednesday, the Ways and Means Committee quickly approved his bill and sent it to the House floor.
House Bill 1879 would have granted one gaming establishment already licensed in Mississippi the legal authority to build a casino in Jackson, in exchange for a minimum capital investment of $500 million for a resort inside downtown Jackson’s Capitol Complex Improvement District.
“This is an opportunity for the city of Jackson to take advantage of opportunities that have been passed over for several years now,” Bell said. “This act provides economic stimulus to the city of Jackson and developers who want to come inside the city of Jackson.”
The measure was the latest attempt in a yearslong push by some lawmakers to clear the way for casino in the capital city. Such efforts last year fizzled quickly in the Legislature after backlash from those who fear economic disruption of existing casinos, including some lawmakers and the Mississippi Gaming and Hospitality Association.
Under current state law, casinos can only be built along the Mississippi River and Gulf Coast, or on land owned by Native Americans. The House proposal would have changed that, allowing for a casino to be built within 6,000 feet, or about one mile, of the state Capitol building.
Proponents of the legislation said the legal authority to build a casino in Jackson, the most populous city in the state at the crossroad of three interstates, would be the primary draw for developers, not tax credits.
“A casino doesn’t need money to be incentivized to come here,” said Conrad Ebner, an accountant who helped draft the proposal. “The casino will do a market analysis and ascertain that they will make money.”
But opponents, including those in the casino industry, said such a move would give one casino an unfair monopoly over the most populated area of the state.
Speaking to reporters after he killed the bill, Lamar said there were already developers interested in building a casino in Jackson, and he expected the Legislature to try again next year at passing a similar measure if the developers were still interested.
“As far as I know, the developers interested in doing this don’t have any plans to go anywhere,” Lamar said.
Those behind the proposal said the plan was not to build a box casino, but a sprawling resort as well. The resort would include retail stores, restaurants, a spa, an RV Park and a hotel with hundreds of rooms.
In a letter sent to state officials last week and obtained by Mississippi Today, Rickey Thigpen, president of the tourism organization, Visit Jackson, said projections show such a casino resort could attract over four million visitors annually. It would create over 6,722 new jobs and bring in over $70 million per year to Mississippi’s economy, he wrote.
On top of the ability to build what proponents say would be a lucrative project, the bill also would have offered financial benefits to developers.
Beyond the casino, it would have also provided tax incentives for developers to restore blighted properties in Jackson. The incentives included a 25% tax credit for building costs.
The legislation aimed to ease the anxieties of other casinos around the state, who have long feared what increased competition from a Jackson casino could mean for their bottom lines.
Under the proposal, developers reinvesting at least $100 million at existing casinos would be eligible for a 10% tax credit, which could be claimed over three years. But the specter of economic disruption still loomed for some lawmakers who were scrambling to review the proposal on Wednesday.
House Minority Leader Robert Johnson represents Natchez, which is home to several casinos. Johnson said the state’s small casinos went through a laborious process getting off the ground, and that a Jackson casino could upend their businesses.
“I’ll do anything I can to help the city of Jackson, but I’m not going to destroy markets on the river,” Johnson said. “Jackson needs a lot of things. I don’t think a casino solves their problems.”
The legislation included a provision that would have made up for revenue shortfalls at casinos in Vicksburg. It did not do the same for Johnson’s Natchez district.
Bell, a fellow Democrat, said Jackson has been deprived of economic development opportunities enjoyed by other areas of the state.
“It’s interesting he would say that because the state of Mississippi has always swayed projects away from the city of Jackson,” Bell said. “So quite frankly, I don’t give a damn about what other casinos have issues with. I’m going to stand up for the city of Jackson. I don’t give a shit about who cares less about (Jackson).”
In 2024, another House measure to pave the way for a Jackson casino died after it caught the Senate, gaming regulators and the casino industry by surprise. That proposal appeared to give special treatment to an unnamed developer, which some speculated was tied to former Gov. Haley Barbour, who had recently pushed the casino development with state lawmakers.
This year’s bill was crafted to award the legal authority to build a casino in Jackson without favoring one developer, said Ebner, one of the proposal’s authors. Lamar told reporters that there were already unnamed developers interested.
Ebner said the measure would have been a much-needed economic boon to a struggling city.
“Unless they are going to move the capital city, the Legislature is going to have to start funding the Capital City,” Ebner said.
Another bill, sponsored by Lamar and seen at least in part as a shot at the casino lobby Lamar, would have increase taxes on Mississippi casinos from 12% to 16%. It also died with Wednesday’s deadline for passage.
This article first appeared on Mississippi Today and is republished here under a Creative Commons license.
Mississippi Today
Senate passes redistricting that puts DeSoto Republican, Tunica Democrat in same district, calls for 10 new elections
Senate passes redistricting that puts DeSoto Republican, Tunica Democrat in same district, calls for 10 new elections
Voters from 10 Senate districts will have to re-decide in November special elections who should represent them in Jackson, pending court approval, under a resolution the Senate approved on Wednesday.
The chamber passed the plan 33-16. Two Democrats joined with the GOP majority to support the plan, while three Republicans joined with the Democratic minority to oppose it.
Even though voters just elected members of the Legislature in 2023, the 10 races will be held again because a three-judge federal panel determined last year that the Legislature did not create enough Black-majority districts when it redrew its districts.
The panel ordered the state to redraw the districts and create a new majority-Black district in the DeSoto County area in the Forrest County area.
Senate Rules Committee Chairman Dean Kirby, a Republican from Pearl, told senators that the newly redrawn map complies with federal law and will allow Black voters in the two areas to elect a candidate of their choice.
“It’s not a partisan ordeal,” Kirby said. “We have a court order, and we’re going to comply.”
The map creates one new majority-Black district each in DeSoto County and Forrest County, with no incumbent senator in either district. To account for this, the plan also pits two pairs of incumbents against one another in newly redrawn districts.
The proposal puts Sen. Michael McLendon, a Republican from Hernando, who is white and Sen. Reginald Jackson, a Democrat from Marks, who is Black, in the same district. The redrawn District 1 contains a Black voting-age population of 52.4%.
McLendon spoke against the proposal, arguing the process for was not transparent and it was not fair to the city of Hernando, his home city.
“I don’t want to be pushed out of here,” McLendon said.
The plan also puts Sen. Chris Johnson and Sen. John Polk, two Republicans from the Hattiesburg area, in the District 44 seat. Polk announced on the Senate floor that he would not run in the special election, making Jonson the only incumbent running in the race.
- The full list of the Senate districts that were redrawn are:
- Senate District 1: Sen. Michael McLendon, R-Hernando, and Sen. Reginald Jackson, D-Marks
- Senate District 2: David Parker, R-Olive Branch
- Senate District 10: Neil Whaley, R-Potts Camp
- Senate District 11: New Senate district with no incumbent
- Senate District 19: Sen. Kevin Blackwell, R-Southaven
- Senate District 34: Sen. Juan Barnett, D-Heidelburg
- Senate District 41: Sen. Joey Fillingane, R-Sumrall
- Senate District 42: Sen. Robin Robinson, R-Laurel
- Senate District 44: Sen. John Polk, R-Hattiesburg, Sen. Chris Johnson, R-Hattiesburg
- Senate District 45: New district with no incumbent
McLendon and Sen. Derrick Simmons, a Democrat from Greenville, offered amendments that proposed revised maps, but both alternatives were rejected.
Simmons, the Senate’s Democratic leader, opposed the plan the Senate passed Thursday because he does not believe any incumbent senators should be paired in the same district.
The House earlier in the session approved a plan that redrew five districts in north Mississippi and made the House district in Chickasaw County a majority-Black district.
Sen. Kirby told reporters he believes the House and the Senate have a “gentleman’s agreement” to pass the other chambers’ plan, which has historically been the custom.
Under the legislation, the qualifying period for new elections would run from May 19 to May 30. The primary election will be held on August 5, with a potential primary runoff on September 2 and the general election on November 4.
Republican Gov. Tate Reeves has no direct say in legislative redistricting, so once the Legislature passes a redistricting plan, it will go back before the federal courts for approval.
This article first appeared on Mississippi Today and is republished here under a Creative Commons license.
Mississippi let a double murderer go free. Twice.
Now he is dead, and an older couple is injured.
In May 2023, the Mississippi Parole Board released James Williams III — 18 years after he was convicted of fatally shooting his father, James Jr., and stepmother, Cindy Lassiter Mangum. Williams had previously tried to poison them to death.
His parole faced pushback from the victims’ family, community members and lawmakers.
At the time, Zeno Magnum, whose mother was killed by Williams, decried the Parole Board’s decision. “He murdered ‘em, threw ‘em in trash bags, put them in Rubbermaid trash cans and threw ‘em out like the trash,” he said. “We are concerned not only for our personal safety, but also for the safety of anyone who may come in contact with this psychopath.”
Parole Board Chairman Jeffrey Belk defended the Parole Board’s decision, saying they received no objection from the family or others at the time — a claim that Magnum’s family disputed.
Less than five months after his parole, he got drunk and wrecked his car on Oct. 20, 2023, the same day of the Brandon-Pearl high school football game, Magnum said. “There were people everywhere. He’s very fortunate he didn’t kill anybody.”
Williams’ parole was revoked, and he returned to prison.
A month later, the Parole Board found that by violating the law, he violated a condition of his parole. Three of four members voted to return him to prison for a year, according to court records, and Belk cast the lone “no” vote.
Hinds County Circuit Judge Debra Gibbs vacated the Parole Board’s decision to return Williams to prison for at least a year for violating parole.
“Mr. Williams has already served more than ninety (90) days in the custody of the Mississippi Department of Corrections,” the judge wrote. “Therefore – unless he is held pursuant to some other sentence or order – he SHALL BE RELEASED IMMEDIATELY from the custody of the Mississippi Department of Corrections and returned to parole.”
The judge agreed with Williams’ argument that his DUI misdemeanor constituted a technical violation of his parole, meaning that 90 days was the maximum period he could be imprisoned for a first-time technical violation. The judge’s decision matched a recent attorney general’s office opinion on the subject.
When word came that Williams might go free again, Cindy Mangum’s sister, Barbara Rankin, said her family set up a Sept. 16, 2024, meeting with Parole Board members, she said. “They let him out a week before we were set to go.”
Around noon Saturday, Williams met his death near Sanctuary Drive. The 39-year-old was driving his 2009 Honda Civic north on Will Stutely Drive when he collided with a 2019 GMC Sierra that contained Curtis Jones, 73, and his 72-year-old wife, Ruth, who were traveling east, according to the Mississippi Highway Patrol.
Williams was pronounced dead on the scene. Paramedics transported the couple to St. Dominic’s Hospital in Jackson. Their injuries remain unknown, and the patrol continues to investigate to determine if Williams had been intoxicated.
“The ironic thing,” Zeno Magnum said, “is if he was still in prison, he would be alive.”
The whole ordeal has been “cloaked in secrecy,” he said. “My mom was killed, and it was like pulling teeth to get information on it. It was tough even for me as her son to get information.”
Williams’ death has brought him a wide range of emotions. On one hand, he doesn’t want to celebrate the loss of a human being, he said, but on the other hand, the death “does bring my family and I a great deal of closure.”
This article first appeared on Mississippi Today and is republished here under a Creative Commons license.
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