Fallout from the City of Indianola’s audit delinquency continues as the city was notified this month that the office of the state auditor has ordered that various local taxes be witheld from the city until it is in compliance with its audits.
The total amount to be witheld is $675,000.
“Dear Mayor Featherstone: On July 8, 2025, the Office of the State Auditor notified me that it had issued a certificate of noncompliance to the City Clerk of the City of Indianola, Mississippi. Pursuant to Miss. Code Annotated Section 21-35-31, the Mississippi Department of Revenue is required to withhold all allocations and payments that would otherwise be payable to your municipality and divert them to the State Auditor to cover the cost of preparing the required audit. According to the State Auditor, the amount of payment to be withheld is $675,000,” a letter from the state department of revenue said.
“Beginning with August diversions (payable in September 2025), the Department will withhold all payments including, but not limited to, diversions for sales tax, use tax, petroleum tax, and homestead reimbursement. Once the full audit payment has been remitted to the State Auditor, we will resume payments to the municipality except for 10% of sales tax diversions, pursuant to Miss. Code Annotated Section 27-65-75. The 10% withholding shall continue until such time as the Department receives written notice from the State Auditor cancelling the certificate of noncompliance.”
The city’s last completed audit was for fiscal year 2018, which was finalized last year.
Jackson-based C.P.A. firm Tann, Brown and Russ is currently working to complete the fiscal year 2019 audit, which it began in early 2024.
The city had already lost access to various federal grants due to the audit delinquency, notably a half million-dollar sidewalk grant through the Mississippi Department of Transportation.
That project was revived this year thanks to the Sunflower County Consolidated School District’s willingness to act as the fiscal agent for the grant.
