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School district loses bond rating

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Superintendent Chad Shealy
Chad Shealy, Vicksburg Warren School District Superintendent (Credit: VWSD)

VICKSBURG, Miss. (Vicksburg Daily News)–On June 4, 2021, Standard & Poor pulled the District’s A+ bond rating. Standard & Poor notes the rating was pulled because of insufficient information.

Their website states:

“Specifically, the withdrawals reflect our failure to receive adequate and timely financial information necessary to maintain surveillance of the ratings in accordance with our applicable criteria and policies. Such financial information includes, for example, audited financial statements or similar financial information.”

A bond rating is not unlike a credit score, but they use an alphabetical rating rather than a numerical one. An A+ rating means the organization is financially sound. An organization that has its rating pulled is unlikely to qualify for any loans or bonds.

Christi Kilroy with the school district explains the rating was pulled because the district has not finalized its 2019 audit. Kilroy states the audit has not been completed because it was suspended during the state auditor’s compliance audit last year. Kilroy did not explain why.

An audit performed by the state auditor’s office last year found “…fraud, waste and abuse” regarding travel reimbursements paid to Director of Financial Operations Shaquita Burke by the Hinds Public Schools District, then duplicated and paid by VWSD. Burke has since left the district.

Kilroy said in an email response to the Vicksburg Daily News that “Auditors are currently working to complete the 2019 and 2020 audits. As it relates to the financial health of the district.” This financial audit is completely separate from the compliance audit conducted by the state auditor’s office.

Kilroy states, “This in no way affects any of the bonds that have already been committed or the work that is going on in the District.” Kilroy adds, “Borrowing by school districts is highly restricted and must conform with Mississippi law. The District maximized its borrowing power when the voters of Warren County passed the facilities bond issue in 2018.  The lack of rating will not impact the finances of the District. The District continues to increase its fund balance and currently has a balance of over $26 million dollars. The fund balance has increased every year since 2014 when the balance was just over $4 million –  except for last year when additional funds were needed to cover COVID-19 response. These funds will be restored quickly with the addition of federal ESSER funds.”

 

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