TUPELO • Mississippi Auditor Shad White has demanded that the Family Resource Center of North Mississippi repay $15.5 million after allegedly misspending federal grant money earmarked to help needy families.
The auditor’s office on Tuesday afternoon issued a raft of repayment demands that stem from ongoing allegations of waste, abuse, corruption and embezzlement that involve the Mississippi Department of Human Services, that agency’s former executive director, John Davis, and a sprawling network of accused conspirators.
These demand letters follow the release early this month of findings by independent auditors who opened up the books at MDHS and several other related organizations, including the Tupelo-based FRC.
Forensic accountants ultimately said that the FRC may have inappropriately spent public money, with $6.7 million of the organization’s examined payments identified as possibly indicating “fraud, waste and abuse.”
And of $19.8 in federal grant money spent by FRC and subjected to scrutiny by these accountants, more than half was deemed not allowed under federal rules restricting how the grants in question are to be spent.
Serious claims involving FRC surfaced in this forensic examination: high-dollar contracts paid for little or no work performed; money awarded to unqualified but well-connected people; sloppy business and accounting procedures; and weak oversight of its own vendors and subcontractors.
FRC leadership did not immediately respond to a request for comment about the auditor’s demands on Tuesday.
But in statements and interviews with the Daily Journal last week and early this week, FRC leadership did address the forensic audit and disputed many of its claims involving FRC.
Casey Lott, who is both an attorney acting on behalf of FRC and a member of the organization’s board – also denied that FRC and Director Christi Webb are responsible for any misspending involving the federal Temporary Assistance to Needy Families program.
“If it’s inconsistent with the federal regulations, that is a Mississippi Department of Human Services problem. It’s not a Christi Webb or Family Resource Problem,” Lott said. “They did what they were instructed to do by the state of Mississippi.”
Davis — the former executive director of MDHS — was served a repayment demand of $96.3 million, according to a written statement by the auditor’s office. This amount includes interest on inappropriate spending that Davis allegedly authorized.
The nonprofit Mississippi Childhood Education Center was served a demand of $68 million.
The FRC repayment demand of $15.5 million is the third largest of 11 demand letters issued by the auditor on Tuesday.
This total includes $12.5 million in questioned spending, and interest on that amount.
Former football star and Mississippi native Brett Favre is also named in a demand letters seeking $828,000 from Favre Enterprises.
“After our first DHS audit, I told the public we would have to consult with our federal partners at the Department of Health and Human Services before coming to final conclusions about who owed what money back,” White said in a statement. “Those partners were waiting for this forensic audit. Now that it’s complete, we are in a position to demand the illegally spent welfare funds be returned to the state.”
Davis – the former MDHS director – and Nancy New – owner of nonprofit MCEC – as well as four others were arrested and charged in 2020 on charges of seeking to embezzle approximately $4.14 million in federal grant money. These charges followed an investigation by the auditor’s office.
Of the six people charged, two have now pleaded guilty – retired wrestler and onetime MDHS employee Brett DiBiase, and former MCEC finance officer Ann McGrew.
MCEC and FRC acted for several years as partner organizations to operate the Families First for Mississippi initiative, using grant money provided by MDHS while under Davis' leadership.
No one associated with the FRC has been charged with criminal wrongdoing.
If the FRC and other organizations and individuals do not pay back the demanded money, Attorney General Lynn Fitch could seek to recover the money through civil action.
In response to criminal charges filed against Davis and his alleged conspirators, the current leadership of MDHS launched an effort to get its house in order and commissioned an independent accounting firm to examine the Temporary Assistance for Needy Families program, or TANF.
Conducted by Maryland-based CliftonLarsonAllen, this forensic audit was released on Oct. 1 and analyzed TANF spending during a four-year period from January 2016 to December 2019.
Out of $126 million in total TANF spending analyzed across the four-year period, auditors say $36 million did not meet federal rules.
Another $40 million in TANF spending is questioned, but could not be tested or analyzed because MCEC did not cooperate in the forensic audit and open its books to CLA.
FRC did cooperate with forensic accountants.
The forensic accounting team tested – directly or using an extrapolation formula – some $19.8 million in TANF expenses associated with FRC, though the nonprofit was awarded nearly double that amount in TANF grants during the four-year period reviewed by forensic auditors.
Out of $19.8 million in TANF spending by FRC that was tested, more than half was deemed by accountants to be outside federal guidelines for the program.
Once a cash assistance program, often called “welfare,” a 1996 federal law reorganized TANF as a block grant, with each state exercising wide discretion over how to spend its portion of the money.
Federal TANF money is intended help needy families care for their own children, to promote job readiness, to encourage marriage and two-parent families and to prevent out-of-wedlock pregnancies.
The core claim now lodged by state authorities against FRC is that its TANF spending that now stands under scrutiny did not advance these four goals.
In response to this forensic audit, Lott provided written responses to the Daily Journal and answered some questions on behalf of FRC.
Lott is managing partner at Booneville law firm Langston & Lott and said he is not paid by FRC for the legal work he performs.
Lott said that FRC followed the directions of MDHS, specifically the former director, Davis. He also emphasized that Mississippi is required to submit to the federal government what’s called a “state plan,” which outlines how it plans to use TANF money.
“MDHS developed a State Plan that it said took full advantage of TANF’s flexibility in methods of reducing welfare dependency while still meeting federal TANF requirements,” Lott said.
Lott suggested that this state plan shield FRC from responsibility for any spending that may have been contrary to federal rules.
“Mrs. Webb and FRC administered the TANF grant funds exactly as they were instructed to and in accordance with the State Plan developed by John Davis and MDHS,” Lott said in a written statement. “If the State Plan was inconsistent with the federal guidelines, then that's falls squarely on the shoulders of MDHS, not FRC.”
MDHS took a different view of the matter.
In a statement provided to the Daily Journal last week, MDHS Executive Director Robert G. “Bob” Anderson said federal approval of a state plan does not itself provide advance approval of any use of TANF money, and that spending from the program is judged against federal guidelines and not the state plan.
“The audit findings speaking to the allowability of the costs under federal regulations is the most accurate measurement,” Anderson said in writing.
He then added: “Ultimately, it will be the federal government, not the State of Mississippi who will determine the allowability of TANF expenditures and any necessary repayments for unallowable or misappropriated funds.”
The Office of State Auditor also took some issue with the FRC stance in a statement issued last week.
“Two separate audits conducted by two different teams of CPAs are clear: some expenditures made by FRC do not fall within federal TANF guidelines,” said Logan Reeves, a spokesman for the Auditor’s Office. “The State Plan was taken into account by both CLA and the State Auditor’s office. Ultimately, a court will decide who is responsible for misspending that money.”
Webb herself declined to speak with the Daily Journal, insisting that she cannot do so because criminal cases against Davis and New remain ongoing.
Lott and Webb declined to answer questions about whether Webb expects to testify during any forthcoming trial.
After declining comment, Webb did say in an email that news reporting about audit findings involving FRC have “killed us” and “put us out of business,” speaking of FRC.
The organization does continue to operate, but with a reduced slate of programming after consolidating its once far-flung operations to an office in Tupelo.
Editor’s Note: Churches with History is an ongoing series about some of Northeast Mississippi’s most storied houses of worship. To suggest a church, contact news editor Adam Armour at email@example.com.
OKOLONA • The quaint little building with a graveyard behind it would be easy to miss if not for a sign showing that the spirit of the Lord dwells there; for those who attend, there is no doubt of the sanctity of this little country church.
Walking inside New Hope Church is like stepping into a modern interpretation of the past. The pews line each side of the aisle, which leads to the classic pulpit backed by the baptismal pool and flanked by the pastor’s office and music room.
The old building is home to a warmth only found in such places, where faith dwells within the congregation and, through them, grows.
New Hope Church was founded on Oct. 6, 1866, when Isaac Mullins deeded two acres of land to Thomas B. Shearer and others, earmarking the land, “for the members of the Methodist Episcopal Church South.”
William C. Gaskin also deeded an additional half-acre the same day. According to the church historians, this is the earliest know record of what would become New Hope Church.
According to the church’s historical writeup, the original building burned prior to World War II, leaving parishioners without a house of worship for several years. However, soon after the close of the war, three men — H. H. Corley, Theron Hill and R. A. Stephens — led a movement to rebuild the church on the grounds where it stood . In 1955, a new building was erected. It’s still used today.
While New Hope sits stationed between Houston Houlka and Okolona, it has bounced around as far as charges.
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“In 1948, New Hope, which had been on the Houlka Charge earlier, was placed with Okolona,” said the church’s historical writeup. “In 1950, it was again placed with Houlka, on which charge it remained until the Van Vleet Charge was formed in 1959.”
According to the documents, the membership began to grow in the 1960s, and in 1975, construction began on an adjoining annex. The 1,500-square-foot addition was home to a nursery, two rest rooms, kitchen facilities and a large dining area. The church members themselves completed much of the work.
Around that same time, the church also withdrew from the Methodist Association. They now call themselves a nondenominational church.
While New Hope’s history is interesting, it is equally important look at where the church stands now and where they plan to go.
Current pastor Steve Driskell has been with the church for 18 months and hasn’t looked back. Utilizing the tools at his disposal, and his passion for the word of God, he has worked, to great success, to grow membership in the church.
“Through what the congregation has told me, the Sunday before I preached my first sermon, there was only two people in the congregation,” he said. “The first Sunday that I actually preached at New Hope, they were having a family gathering. This is an old family church, and so I got to preach to about 46-47 people that day. They were excited to see a preacher coming in, even with all this going on, and we’ve grown since.”
Driskell said the church now averages between 36 and 38 congregants on a Sunday morning.
When he fist began preaching at New Hope, Driskell split his time between the Okolona church and his home church in Brewer, where he was deacon.
“I was trying to make it where I could still do what I was called to do, but also fulfill my obligation at Brewer,” Driskell said. He spent the first three months preaching two Sundays at New Hope, two Sundays at Brewer, and so on.
Eventually, the congregation of New Hope asked him to become their full-time pastor. He considered the request an honor. While coming to such a historic church might have scared some away, Driskell has reveled in the experience, and even learned from it.
“It has been humbling. That is the best was I can put it,” he said.
And although the church has been standing for longer than any member of its congregation, Driskell believes New Hope is still in its infancy. There’s room to grow, he said, and the church’s future looks to be brightening like the dawn.
“The best way I can describe New Hope,” he said, “is that we are a 154-year-old brand new church.”
TUPELO • After getting ousted from municipal office earlier this year, Mike Bryan is attempting to mount a strong comeback and represent much of west Tupelo on the Lee County Board of Supervisors.
Bryan, who served on the Tupelo City Council for 16 years, believes he can successfully launch such a comeback by highlighting the need for a leader with the budgeting and bonding experience to find a solution to building a new jail and and who can responsibly develop the area around the HIVE Industrial Complex.
“I have 16 years experience, and I want to apply that 16 years experience to the citizens of Lee County,” Bryan told the Daily Journal. “I have experience in working with elected officials on the state, national and local level.”
The HIVE Industrial Complex is a facility being developed by the Community Development Foundation to grow economic activity in Northeast Mississippi. The complex is located to the north of Highway 6, to the south of West Main Street, or old Highway 6, and to the east of Bissell Road.
Bryan believes officials should carefully consider the implications that the development of the large economic complex will have on the surrounding area — particularly to road infrastructure and drainage.
The Lee County Adult Jail has long been a thorn in the side of the county board, with the Lee County Sheriff constantly reiterating that the facility has fallen into disrepair. The board has failed to come up with a solution to the facility for the past five years.
This past April, a consultant hired by the county proposed creating a new judicial complex, which would comprise a new jail, E-911 facility and administrative office for the sheriff’s department.
The county supervisors have also proposed using bonded debt to build a version of a new jail, renovate the county library and help maintain county roads.
Bryan believes the county should remove the library and other county projects and first focus on the jail project.
“We need to take a look at the jail on its own merits and pull out everything else,” Bryan said. “Then we can address the other projects on their own merits.”
Bryan then would like to receive a breakdown of what each item in the proposed judicial complex would cost to see what the county can reasonably build. But he thinks the two buildings that should receive the highest priority are a new jail and a new administrative office for the sheriff’s department.
Another topic that the supervisors may have to take a firm stance on in the future is whether medical marijuana facilities can freely operate within their borders.
The Mississippi Legislature has agreed on a draft of a medical marijuana program that includes a provision that would allow the Lee County Board of Supervisors to prohibit dispensaries, processing facilities and growing centers from operating in the unincorporated communities in the county.
"I don't want Lee County to be a marijuana county," Bryan said.
Bryan said he supports the spirit of medical marijuana, which he defines as a patient receiving treatment under the supervision of a physician. But the former councilman said he does not believe the county should allow dispensaries and growing facilities to operate in the county.
“I don’t like to play Monday morning quarterback,” Bryan said. “And I would like to see the language, talk to the citizens, talk to the other board members and see what’s best for Lee County.”
Bryan would also like to see if the county could place a dam on a portion of Town Creek in east Tupelo to potentially develop some type of waterfront area for business owners to open up new shops.
Bryan’s inspiration for the Town Creek idea came from a trip he and other Tupelo officials took to Greenville, South Carolina, where he saw they had done something similar with a creek near their downtown area.
All candidates must run without a partisan affiliation in a special election, so there are no party primaries. All qualified candidates will appear on the Nov. 2 ballot. If no single candidate receives an outright majority of the vote, a runoff election will be conducted on Nov. 23 between the two candidates who receive the largest share of the votes.
The winner of the race will serve the remainder of former Lee County supervisor Todd Jordan’s term on the board and will be up for re-election in 2023 for a full four-year term.
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Absentee ballots are currently available with the Lee County Circuit Clerk for certain voters. The deadline to vote by absentee is noon on Oct. 30.
TUPEO • Face masks will be optional for Tupelo Public School District students beginning Wednesday, following a policy change approved by the district's Board of Trustees to shift criteria for lifting its mask mandate on Tuesday afternoon.
The board voted during its September meeting to base the district's masking policy on Lee County's positivity rate, but criteria for setting and lifting mask mandates will now be based on the district's quarantine rate.
Superintendent Dr. Rob Picou said the change was recommended to the board because, based on the district's analysis of data, no transmission was occurring in schools. COVID-19 cases among students and staff were occurring in the community, not at school.
"The whole thing, like I've said before, has been risk and reward," Picou said. "We adjust a variable and see what the outcome is. We'll monitor the numbers now and see what happens. With any luck, they'll stay right where they are."
TPSD Board President Joe Babb said the test positivity rate trended exactly with case numbers last school year, but that has not been the case recently. While the number of COVID cases have declined over the last few weeks, the positivity rate has remained relatively static, Babb said.
The bar for lifting the mask mandate is having fewer than 5% of students and staff quarantined for a period of two weeks, which is considered "minimal/moderate spread."
Picou said the district quarantine rate has been below 5% for several weeks now. As of Friday, the quarantine rate was just 1.03%, he said.
Between Aug. 28 and Sept. 23, there were 137 positive COVID-19 cases among students, teachers and staff in Tupelo Schools. Last week, that number had decreased to 27 — the lowest number of cases during a single week this school year.
When the quarantine rate is 5% or higher, spread is considered "substantial" and masks will be required.
Additionally, when the quarantine rate is below 5% but an individual school has multiple outbreaks (three or more cases within a classroom setting) over a five-day period, masks will be required for that individual school until the quarantine rate has a two-week trend of less than 5%.
The policy was previously based on having Lee County's test positivity rate, which is the percentage of COVID-19 tests administered in a specific area that come back positive, remain at or below 10% for a period of two weeks.
Masks have been required for students and staff since the start of the school year on Aug. 4.
When the TPSD Board first mandated masks during a special called meeting on Aug. 2, they committed to making masks optional as soon as it was deemed safe.
"We've just tried to do our best for our students, teachers and stakeholders," Babb said. "If the threat arises again, we won't hesitate to ask that (masks be worn) again."