FAYETTE COUNTY, Ky. (LEX NEWS) — After a months-long audit of Fayette County Public Schools, advisory firm Weaver, L.L.P. has "identified significant control weaknesses" regarding the current state of the district's budget process, the majority of which are classified as high risk.
According to the firm, the six core themes include the following, and once they are remedied, will establish a more accurate and transparent district budget:
- Supporting documentation and audit trail: In the audit, Weaver found that key FCPS budget and expenditures occur without complete documentation or an audit trail, and budget amendments lack documented justification.
- Policies, procedures and internal controls: District policies were found to be outdated, incomplete or absent, leaving "rules and thresholds to individual judgment." According to the firm, travel policies have not been updated in over a decade.
- Roles and responsibilities: Issues with role separation was also found. Transactions were found to lack evidence of independent review and approval, and "system permissions can allow one user to create, approve, and post budget entries, and a single senior role oversees accounting, budgeting, grants, and reporting," the firm wrote.
- Reconciliation and monitoring: The district's budget performance and purchase activity were found to "lack routine reconciliation, variance thresholds, and monitoring, producing a reactive process." Additionally, the purchase card charges are not reconciled consistently or matched to statements.
- Coding, classification accuracy and reliability: According to Weaver, budgeted and actual revenues and purchased contained errors and were not consistently recorded to the correct object code. As a result, "actual results no longer align with their budgeted line items,and budget-to-actual comparisons by category become unreliable for reporting and planning."
- Governance and board oversight: Weaver found that the board, and the public, received incomplete and inaccurate information, causing a weakened oversight. Additionally, budget amendments and fund transfers only reached the board as information, not for formal approval.
The firm went on to recommend a over 70 actions, providing a path for the district to move forward.
The top ten of those action items include:
- Restore and enforce a controlled budget amendment workflow
- Enforce segregation of duties across financial system access
- Establish standardized accounting procedures and enforce close reconciliations
- Deliver complete and accurate reporting to the Board and public
- Establish a formal budget monitoring framework
- Adopt a documented budget preparation and forecasting methodology
- Implement a comprehensive grant management framework
- Require complete, pre-approved, and reviewed reimbursement documentation
- Strengthen P-Card authorization, coding, and reconciliation controls
- Refresh travel policies and enforce Board pre-approval verification
The firm found that between October 2023 and August 2025, budget amendment and transfer workflow was unenforced, and that district policies do not require a review or approval of amendments of any amount. Additionally, that no formal budget monitoring or oversight exists.
The district also had revenue issues and expenditure errors, including an unexplained $20.4 million in salary overage and an unsupported $3.5 million in occupational license tax receivable written off in January.
Other issues were found regarding the lack of reimbursement documentation and issues with purchase cards lacking a complete audit trail. According to Weaver, board-approved limits were not evidence or were exceeded in 8 of 50 cases, for a total of over $30,000.
The district's travel policy and approval for travel was also found to be inconsistent, with policies last revised between 2010 and 2013.
Weaver provided several recommendations for the board, including restoring the district's general fund "contingency to at least the 2% statutory minimum and rebuild toward the 6% district procedure via a Board-approved replenishment plan with a timeline and funding mechanism."
The firm also recommended adopting a "written budget-preparation and forecasting framework,"as well as improving its transparency with the public by disclosing all balances, major reallocations, and adopting policies that require all budget materials be factually accurate and complete.
In a statement, Fayette County Schools said that the audit's findings and recurring themes with documentation, process, internal controls and accuracy align with the findings of Chief Financial Office Kyna Koch.
“Weaver’s findings validate the urgent work we have already put into motion across our finance department.” Koch said in the release. “Over the past several months, our team has identified and addressed a number of core operational needs that are highlighted in this report, and we are already deep in the process of updating long-overdue policies. We have made it a point to share this progress at every board meeting and media briefing. We will continue to be honest and clear with our community about where our district stands, remaining intentional with every action we take to ensure the long-term stability of Fayette County Public Schools.”
According to FCPS, the review identified control gaps, policy deficits and concentration of authority with the district's budget process, as well as non-compliance and outdated policies relating to travel and expense reports.
“As acting superintendent, I fully accept the details and actionable feedback outlined in the Weaver audit report,” said Acting Superintendent Bill Bradford in the release. “These challenges will be directly addressed as we continue to rebuild the spirit, pride, and foundation of Team FCPS. I want to thank the Board of Education for authorizing this audit so that our team can have the vital information we need to take short- and long-term action on these priorities."
FCPS reports that the district and staff will need "adequate time" to review the firm's findings and ask questions before moving forward. However, the district remains committed to strengthening and improving decades-long issues surrounding FCPS's budget and finances, the release said.
Read the full release below.
