Investigators from State Auditor Stacey Pickering's office arrested Thweatt at the school district's central office about 8 a.m. Tuesday.
He is alleged to have transferred the title of a truck purchased by the school district to his name and to have had school employees install a district-owned air conditioning unit at a mobile home he owned in Starkville.
Pickering said Tuesday the investigation remains open on Thweatt, as well as other school district employees or administrators.
"If any other administrators or personnel of the school district were involved in anything like this, they will be held accountable, and we will find that out," he said.
After his arrest, Thweatt was brought to Lee County Justice Court, and Judge Rickey Thompson set bail at $10,000. Thweatt was released on a $10,000 property bond about 11:30 a.m. He did not return a Daily Journal phone call seeking comment.
Lee County Superintendent Jimmy Weeks said Thweatt, who has worked for the district about 15 years, was placed on paid administrative leave. The school board met in executive session in a special-called meeting late Tuesday afternoon to "discuss a personnel matter," Weeks said. They met for about an hour, and school board attorney Gary Carnathan said no action was taken.
Weeks had issued a statement earlier in the day after a meeting with state investigators. "The district has been made aware of the charges against Mr. Thweatt," the statement read. "At this time, the district has no further information. Mr. Thweatt has been placed on administrative leave effective today, April 17, 2012."
The investigation of Thweatt, 50, began during an audit, Pickering said. Various whistleblowers came forward as they started asking questions and looking, he said.
"I want to thank the new superintendent and his staff; they were very helpful in helping us work this case," Pickering said. "The district attorney, Trent (Kelly), and his staff have been phenomenal in helping us on the prosecution side. I will look forward to holding this individual, Mr. Thweatt, to justice."
The York air conditioning unit reportedly was installed at a mobile home where Thweatt's son lived with other Mississippi State University students, Pickering said. State auditors seized it Tuesday morning, as well as the truck, a 2006 Ford Ranger pickup, which Thweatt drove to work.
The truck was purchased by the school district, Pickering said, and it was worked on in the district's bus shop. Thweatt allegedly transferred its title to his name Feb. 16.
Pickering said investigators concluded that from the time of the purchase "his intention was to eventually convert it to his own personal use."
Thweatt was arrested after seizure of the district's property with a search warrant. Thweatt was "very cooperative" and looked surprised when he was arrested, Pickering said.
The Lee County investigation is one of several cases handled by the auditor's office in the past year involving allegations of embezzlement in Mississippi school districts.
District Attorney Kelly said his staff is preparing for a Lee County grand jury presentation but couldn't comment further because the school district investigation is ongoing.
At this point, Thweatt was charged with two counts of felony embezzlement, which carries a maximum penalty of 10 years and a $25,000 fine per count. Felony embezzlement involves items of value more than $500.
In addition, the auditor's office will try to recover interest on any money that belongs to taxpayers, as well as the cost of the investigation.
Weeks said the district has not named an interim business manager. The business manager's job is essentially to work with the district's money, including monitoring accounts payable and bill payments, ensuring that the district remains within its budget and working with the superintendent and school board to develop the budget.
JB Clark and Patsy Brumfield contributed to this story.