MEMPHIS — The Tennessee Comptroller released a 667-page forensic audit report on Memphis-Shelby County Schools' finances and operations on Wednesday. The audit identified more than $54 million in district spending as potential fraud, waste, or abuse, primarily in contracts.

This amount represents approximately 1% of the district's budget between 2021 and 2024. State Comptroller Jason Mumpower stated the audit shows "systemic failures" in district management. Initial findings from the audit were released in April, identifying more than $1 million in spending considered waste or abuse over a three-year period when the audit review was 25% complete.

Memphis-Shelby County Schools has had four superintendents in the past five years. Preliminary audit findings cited leadership instability and staff retention issues as contributors to a lack of institutional knowledge, and noted weaknesses in accountability and recordkeeping systems. Superintendent Roderick Richmond stated that the turnover in superintendents has undermined public trust and district management.

Days before the initial audit results were released, district leaders adopted plans to strengthen internal controls and modernize document systems. Richmond pledged that more than 80% of the district's employee files and 95% of payroll documentation would be complete by the summer.

Memphis-Shelby County Schools issued a written response to the final audit release on Wednesday. The district's statement said, "Independent assessments provide an important opportunity to strengthen accountability, evaluate operations, and identify opportunities for continuous improvement." The statement noted that the report examines matters spanning multiple years, with the majority predating the current administration. Under the state takeover law, Superintendent Richmond has 45 days to identify key issues from the final report and present a corrective action plan to the board.