LEXINGTON, Ky. (LEX NEWS) — Fayette County Public Schools is working to build its 2027-28 budget while still grappling with a projected $10 million deficit in its fiscal year 2026, after spending beyond its $700 million budget.
A third-party audit completed Monday found significant weaknesses in budget oversight, documentation and internal controls, and also found inaccurate reporting to the board and public. Auditors presented more than 70 recommendations to the board.
School Board Chair Tyler Murphy said the audit findings point the way forward.
"This report is a really roadmap to how we move forward," Murphy said.
Murphy said many of the proposed changes have already begun.
At Wednesday's Financial and Accountability Committee meeting, district leaders shifted focus to building the 2027-28 spending plan. Chief Financial Officer Kyna Koch said the 2026-27 budget is mostly finished.
"Eighty-five percent of your budget is in salaries and benefits, and everybody's under contract. There's not a lot you can do," Koch said.
District leaders reviewed the largest share of the budget, which includes staffing the district's 70 schools. That includes everything from principals and teachers to mental health professionals and police officers.
According to data presented at the meeting, Fayette County staffs its schools at nearly double the state's minimum requirements. At a academy high school with 1,800 students, the state requires 68 positions, FCPS funds 117.
Board member Hunter Stout called for an immediate review, saying the district should compare its staffing numbers to surrounding districts.
"Everything across the board in Fayette is generous compared to the districts that surround us," Koch said.
The board also reviewed a rough draft of the upcoming budget. The tentative fiscal year 2027 budget is over $711 million. More than half goes to staffing and operations. Other major expenditures include $172 million in state-paid retirement/insurance and $70 million for transportation, grounds and maintenance. Koch said legal costs are expected to rise this year because of lawsuits.
Board members raised questions about potential cuts, from staffing to athletics.
Finance and Accountability Committee Chair Jenna Jennings pressed on where reductions could realistically be made.
"If you have no where to cut from, where do we cut?" Jennings said.
The question of where to cut remains unanswered. Koch warned the discussions ahead will not be easy.
"You don't start the year ten million down and it not hurt," Koch said.
The board's next budget meeting is scheduled for September, where discussions on the budget will continue.
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