On Nov. 14, 2025, the Mississippi State Board of Education voted to place the Okalona Separate School District into a district of transformation for financial reasons, abolish the district under state statute and appoint John Farrell as interim superintendent; the board also authorized up to $3,000,000 in emergency loans to be made available to the district.

Mississippi Department of Education staff told the board the action followed an Oct. 30 notice from the district that it could not meet its November 2025 payroll obligations and incomplete financial records supplied to MDE. "The district was unable to meet the November 2025 payroll obligations for district employees and requested the need for financial assistance from the school district assistance fund," Joanne Malone said, presenting on behalf of MDE leadership.

MDE financial staff provided the board with the department's preliminary accounting. Kim Wiggins, chief operations officer, said MDE estimated a projected payroll need of $518,191 for November and was able to verify roughly $406,275 in state and federal revenue available to the district, leaving an estimated shortfall of about $111,916. "We determined that the projected payroll need is $518,191 for November," Wiggins said. MDE staff also reported a maintenance fund deficit of about $195,000 and noted that the district has not completed an independent annual audit since fiscal 2021.

Wiggins told the board that documentation from the district was inconsistent and incomplete: vendor invoices, a full claims docket, purchase-order and general-ledger reports and contract award totals were missing or did not reconcile with cash-flow reports. MDE staff said the conflicting records create "significant risk that employees, contract service providers, and federally funded staff may go unpaid and basic operations may not be sustained." The department also told the board it could not confirm whether federal programs such as ESEA, IDEA, Child Nutrition and Perkins were being managed in compliance with federal requirements because of incomplete records.

Board members asked for clarifications on outstanding liabilities and the district's history. Chairman Matt Miller asked whether an emergency loan that funded an earlier conservatorship had been repaid; Wiggins replied, "Yes, sir. That loan has been repaid." Mary Warner and others pressed staff on the apparent $420,000 federal withholding liability the district's business manager had mentioned; Wiggins confirmed there were significant discrepancies in withholding and other records that required further forensic review.

After questions, the board voted unanimously to enter executive session to discuss investigative matters relating to alleged violations of law and the district's financial condition. Upon exiting executive session, Chairman Miller read a resolution finding that the Okalona Separate School District is impaired with a serious lack of financial resources and placing it into a district of transformation under Mississippi Code annotated §37-17-6(12)(b)(3). The resolution states that, under §37-17-13, the board will abolish the district effective that date, exercise powers formerly held by the local board and superintendent, and may reconstitute or alter district boundaries when impairments are corrected.

The resolution also appoints John Farrell as the temporary interim superintendent for the formerly existing district and makes up to $3,000,000 from the School District Emergency Assistance Fund available, on loan, to the schools formerly constituting the district "as needed," according to the read resolution. The board did not read a roll-call vote tally into the public record for the resolution during the readout; the motion and specific vote counts for the final resolution were not specified in the meeting transcript.

The State Board of Education's action transfers operational authority to the board and authorizes staff to pursue forensic accounting and other interventions intended to stabilize operations and protect student services. The chairman said the matter would be discussed further at the board's next meeting.