Category: MSCS Takeover

As Tennessee’s new state takeover law for Memphis-Shelby County Schools moves from legislation to implementation, many of us have questions about what the law actually says, how the oversight board would function, and what powers it would have over the district. We’re breaking down the law section by section to help families, educators, students, and residents better understand the structure, authority, and long-term implications of the Educational Oversight Board established under Public Chapter No. 1057 (full text of the law here).

The Commissioner of Education is required to initiate the establishment of a nine-member oversight board for a Local Education Agency (LEA) if the district meets four (4) or more of the following six criteria:

1. Mathematics Proficiency: Assessment data indicates that 50% or more of enrolled students are not proficient on state comprehensive or end-of-course examinations.
2. English Language Arts Proficiency: Assessment data indicates that 50% or more of enrolled students are not proficient on state comprehensive or end-of-course examinations.
3. School Accountability Ratings: Twenty-five percent (25%) or more of the schools within the LEA received a “D” or “F” letter grade under state evaluation metrics.
4. Chronic Absenteeism: Twenty-five percent (25%) or more of the student population missed 10% or more of the school year.
5. Priority Designation: At least one school within the district has maintained a “Priority School” status for five consecutive years.
6. Financial Management Audits: State comptroller audits identify deficiencies in internal controls, accounting practices, or instances of mismanagement, waste, or fraud.
7. Administrative Turnover: The local board has employed more than two interim directors of schools within a four-year period.

Composition and Term: The board consists of five members appointed by the Governor, two by the Speaker of the House, and two by the Speaker of the Senate. The board is mandated to operate within the district for an initial term of four consecutive years.

The oversight board is legally required to execute the following administrative functions:

• Conduct an Annual Needs Assessment: Review internal district operations, including teacher licensure, educator evaluation scores, retention rates, class sizes, instructional materials, financial statements, facility maintenance, and employment contracts.
  
• Formulate a Transformation Plan: Develop a strategic plan with measurable benchmarks designed to optimize funding allocations, address chronic absenteeism, improve literacy outcomes, and rectify accounting or operational deficiencies.
  
• Review Proposed Budgets: Review all proposed budgets and budget amendments from the local board of education prior to their submission to the local funding authority.
  
• Report Compliance Issues: Refer any substantiated or suspected statutory offenses involving public funds or administrative duties to law enforcement, the district attorney, or the state comptroller.
  
• Provide Annual Reporting: Submit regular progress reports detailing academic and operational benchmarks to state executive leadership, legislative committees, and local funding bodies.
  

The act grants the oversight board explicit authority over several areas of district administration:

• Budgetary Veto Power: The oversight board may veto a proposed local school budget in its entirety or via individual line items. If the local board fails to make requested revisions, the oversight board is authorized to submit its own budget directly to the local legislative body for adoption.
  
• Contractual Oversight: All contracts, purchases, or financial expenditures totaling $\$50,000$ or more require board approval. Agreements executed without this approval are statutorily defined as legally unenforceable.
  
• Personnel Management: The board possesses the authority to terminate the employment of any LEA employee, including the director of schools. In cases of contract employees terminated for cause, the statute dictates the forfeiture of separation compensation, subject to the express terms of the employment contract. The statute preserves statutory due process rights for tenured teachers and principals.
  
• Administrative Appointments: If the oversight board terminates the district’s director of schools, the authority to select and contract a replacement for a term of up to four years transfers to the oversight board.
  
• Directive Authority Over Local Boards: The oversight board may mandate or prohibit discretionary actions by the local school board or superintendent if deemed necessary for district performance, including decisions related to school openings, closures, or consolidations.
  
• Charter School Applications: A local school board may not deny public charter school applications, renewals, or appeals unless the oversight board approves the decision to deny. If the oversight board disagrees with a denial, the application is approved.
  
• Property Management Review: The board is authorized to review and modify the district’s list of underutilized or vacant property available for public charter school utilization.
  
• Staffing and Third-Party Contracts: The board may hire up to three dedicated staff members, reassign central office personnel, or contract with external vendors to complete its required assessments and plans.
  

To maintain administrative continuity, the statute restricts the local district’s capacity to litigate these interventions:

• The local board of education is not authorized to bring a cause of action, intervene in a cause of action, or expend public funds to legally challenge actions taken by the oversight board in accordance with this statute.
  
• If the LEA continues to meet the triggering criteria at the conclusion of the initial four-year period, the existing board is vacated, and new members are appointed to serve a subsequent two-year term.