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Mississippi Poised To Take Over Cash-Short District

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Mississippi appears poised to take over the financially strapped North Panola school system in Sardis under a so-far-untested law passed in 1991 that allows the state to assume control of troubled districts.

Legislators representing the region served by the school district introduced bills last week to expedite the takeover process, and state auditors and education department officials spent the week in Sardis scrutinizing the district's books.

"In a nutshell, they are broke," said Jim Hemphill, a spokesman for the state education department.

A preliminary review suggests that the 2,206-student district will fall $1.2 million short of its $10 million budget by the end of June. The district experienced an $812,000 shortfall last year, and current revenues exceed expenditures by about $450,000.

In each of the past three years an independent accounting firm has reported that the district's books were in such bad shape that it could not issue an opinion, state Rep. Leonard Morris said. But the district's fiscal crisis only became widely known last month, when teachers and staff members received checks for 70 percent of their usual pay.

Last week, legislators and representatives of the education department said the district would not make its January payroll if the state did not intervene.

Sorting Out the Books

District officials must submit a report to the state school board by late this week spelling out plans to eliminate the deficit. If the state board approves the plan, the district will have 30 days to get its expenditures under control and ensure that the deficit does not get larger. If the board rejects the proposal, the state takeover process will begin.

Under Mississippi law, school districts are not allowed to operate with a deficit. The law passed in 1991 allows the state to take over troubled districts if the governor declares a state of emergency and then designates the state education department as the intervening agency.

But legislators expressed concern last week that it could take months to implement such a takeover of the North Panola district, and they introduced two bills intended to expedite the process.

One measure would bail out the district by providing more than $1 million from a rainy-day fund. The district would be required to pay back the money without interest within five years. Another would dissolve the current local school board and enact necessary budgetary cuts and personnel changes to get the district in the black, according to Rep. Clayton Henderson, one of the bill's sponsors.

Other legislators have suggested that the state likely would ask the district's superintendent, Vernon Jackson, to resign. Mr. Jackson was just hired last July.

District officials did not return phone calls last week.

In a letter to Mississippi schools chief Tom Burham last month, State Auditor Steven A. Patterson said his staff would review the district's finances, examining everything from outstanding purchase orders to canceled checks. The office was expected to issue a final report this week.

Rep. Morris said last week that the fact that independent accountants could not issue an opinion for three years on the district's financial state should have raised some red flags. "The community is disturbed, and rightfully so. These students deserve a quality education just as well as students in any other part of the state," he said.

"It has been a complex situation," said Sen. Nolan Mettetal, who served on the North Panola school board for three years before being elected last November to the legislature. "It is such a combination of factors. But we are very optimistic [about the takeover.] From the people I have talked to in the community, they see it as a necessity."

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