JACKSON- A lawsuit that began in 2007 has been brought to a resolution resulting in the Jefferson Davis County School District repaying over $1 million following the misuse of sixteenth section land funds by the District.

This includes $906,885.69 in 2004 and an additional $500,000 in 2005. Both amounts were transferred from the sixteenth section land fund to the district maintenance fund for unallowable expenses. Statutes limit the use of sixteenth section principal funds. Mississippi Code Annotated § 29 3 113 allows only the interest and income from the trust property to be expendable by school districts.

The State Auditor filed the lawsuit in Hinds County Chancery Court in 2007 against the Jefferson Davis County School District for this misuse of sixteenth section funds. The settlement of this lawsuit is between the State Auditor, Jefferson Davis County School District and CNA/Western Surety.

“Our attorney and special agents working this case determined that $153,114.31 of the over $1 Million transferred from the sixteenth section funds in 2004were allowable expenses leaving the remaining $906,885.69 as an unallowable expense under State Law,” said State Auditor Stacey Pickering. “In addition, we concluded that the $500,000 transferred for the removal of asbestos in 2005 must also be repaid since the school did not spend money for any removal.

“The State Auditor’s Office issued demands against Jefferson Davis County school board members for these funds in 2007, and I am pleased to finally resolve this case on behalf of the taxpayers of Mississippi.

Mr. Ike Haynes, current Superintendent of the Jefferson Davis County School District, commented that, while disputed, this matter was a dark cloud over the District when he took office. He and the District’s Board of Trustees are pleased to have the matter resolved so that it no longer distracts the District from the business of educating its students. Mr. Haynes reiterated his pledge to protect the public funds of the District and provide a quality education for the children of Jefferson Davis County.

Jefferson Davis School District began repayment of these funds prior to the final agreement reached in September 2009. To date, $781,472 has been repaid. The remaining balance of $625,413.69 is due to the sixteenth section land account by October 15, 2009 which will bring the total recovered by State Auditor Pickering since taking office in 2008 to $3.1 Million. Th3 $3.1 Million recovered represents the largest recovery in a 2 year period in the history of the State Auditor’s Office.

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