The Madison Parish School District is facing a rapidly deteriorating financial crisis, following revelations of gross mismanagement, undocumented expenditures, and a $1.5 million payroll deficit that was sustained through unauthorized transfers from restricted funds.
In a finance committee meeting held June 5, 2025, forensic accountants from Allen, Green & Williamson LLP presented damning findings after being called in to clean up the board's unreconciled accounts and assist with its long-overdue 2024 audit. The auditors identified six major failings contributing to the district’s financial failure, with particularly egregious violations involving restricted grant funds, employee stipends, and staffing expansions that outlived their funding source.
"We found five key issues that were the catalyst... and then we have a sixth area... trends that we identified" said Debbie Finlay, one of the forensic accountants.
To make payroll, the district repeatedly withdrew restricted funds from the Child Nutrition Program, Workers' Compensation Fund, and other designated accounts, all without documented repayment. Transfers included $875,000 from the Child Nutrition account across August to October 2024, $640,000 from Workers’ Compensation in January and March 2025, and $500,000 again from Child Nutrition in May, briefly repaid but still indicating cash flow instability.
“Currently we have $1.515 million that’s been effectively taken from other funds to support... payroll” said Finlay.
These funds are legally earmarked for specific services, removing them to cover salaries could violate both state and federal financial protocols, potentially exposing the district to penalties.
The district also failed to request reimbursement for nearly $1 million in Elementary and Secondary School Emergency Relief (ESSER) and other federal grants before deadlines expired, forcing the general fund to absorb those costs. Key expenditures went unclaimed due to administrative failures and oversight under a previous business manager.
“These are funds that were paid that were not requested and you did not receive” said another forensic auditor, Christi Lofton.
Despite repeated warnings and clearly defined timelines from the Louisiana Department of Education (LDOE), staff failed to act, causing a loss that deepened the fiscal wound.
Between July 2024 and May 2025, the district issued $894,533 in stipends to 260 employees, with 14 individuals receiving over $10,000. This level of stipend expenditure, nearly unchanged from the COVID funding years, has persisted despite the exhaustion of federal emergency funds.
“There were 14 employees that received more than $10,000 in stipends” explained Finlay.
Some of the stipends were never approved by the board, potentially violating legal governance procedures.
“It’s the stipends that were not board approved... there’s a problem with those” said Lofton.
Since 2019, the school district has grown by 71 employees, despite a marked drop in student enrollment. Many of these hires were funded by ESSER grants that expired in 2024. The district has not made corresponding reductions in force, creating a structural deficit in salary obligations totaling approximately $2.5 million annually.
“You’re spending on salaries and benefits for that increase in staffing... $2.5 million” said certified public accountant Tim Green. Green is a partner at the auditing firm from Monroe and is leading group of auditors.
Perhaps most concerning was the revelation that the district’s books had not been reconciled since June 2024, leading to delayed audits, hidden liabilities, and blind spending.
“The payroll bank account is what we call an IOU fund... you should think there is no balance” explained Green.
A letter from the LDOE questioning $1.5 million in expenditures from fiscal year 2021 shows years of neglect and signals that future repayments could be forthcoming.
Madison Parish School District Superintendent Charlie Butler emphasized that reductions in staff may be inevitable, though specifics remain uncertain.
“There’s no [Reduction in Force] at this point, but we’ll see in the next week” said Butler.
With only $632,921 remaining in Certificates of Deposit and the district’s annual $2.3 million in property taxes not expected until early 2026, the financial outlook is grim.
“The cash flow will continue to be challenging until the end of this calendar year” said a report by the auditing firm.
Through promises of reform, there is hope for a slow recovery.
“I asked our business manager... he kept telling us we were doing good... and now look” said school board President Eddie Fountain.
As Fountain somberly put it, “Once I was blind, but now I see.”
The Madison Parish School Board was unaware of these issues until the audit.
