Kentucky Education Commissioner Terry Holliday will recommend next week to the Kentucky Board of Education that the Fleming County school district — deemed to be in "financial crisis" — be placed under state assistance, spokeswoman Nancy Rodriguez said Wednesday.
The state school board meets Dec. 4.
If a district is designated as "state-assisted," the Kentucky Department of Education helps district officials and the local school board implement a plan to correct deficiencies uncovered in a recent department management audit.
The audit executive summary said the district was dealing with a financial crisis resulting from poor financial management over a long period.
The audit said the district had no systems in place to monitor its financial standing.
The executive summary said superintendent Tom Price had been challenged with overcoming the district's financial issues that existed when he took the job July 30, 2012. The report said he had been able to maintain the support of teachers, principals and board members.
"The community, teachers, administrators and board members were shocked when the magnitude of the financial crisis became public," the executive summary said.
"They are frustrated with prior leadership, and there is confusion about 'where the money went.' Teachers are also frustrated with the number of initiatives they have been asked to implement with fewer resources."
Associate commissioner Hiren Desai said in an interview Wednesday that under state law, a school district has to have two percent of its operating budget in reserve.
Fleming County should have had approximately $315,000 in its checking account as of June 30, but according to an unaudited fund-balance report, the district had only $134,000, Desai said.
"We've got their budget balanced as of this year, but they have no contingency at all, and they are required to have two percent of their budget available," he said.
In an Oct. 16 letter to Fleming County board chairman Jamie Collinsworth and Price notifying them of his recommendation, Holliday said it was clear that a pattern of a significant lack of efficiency and effectiveness in governance and administration exists in multiple areas.
He said it also appeared that the local board supported improvement and wanted to address the concerns, but board members thought they needed outside help.
In response, in an Oct. 29 letter, Price told Holliday that the board welcomed the help "in our efforts to correct past and current discrepancies in the management of the Fleming County School District."
Price and Collinsworth could not be reached for comment Wednesday.
Fleming County school board member Roy Gray said in a telephone interview that the board was going to correct the problems.
"It's getting better," he said.
If the district doesn't comply with the state's plan, Holliday said in his letter, he might recommend that the state manage Fleming County Schools.
That's a different designation than state-assisted. If a districts is designated as state-managed by the Kentucky Board of Education, then all aspects of management formerly exercised by a local school board and superintendent are transferred to the commissioner or a state-appointed manager.
The only district under state management is Breathitt County, Rodriguez said. In October, Holliday reported that the Breathitt school district was making progress under state management, and he'd like to restore local control of the district soon.
The Robertson County school district is in state assistance, Rodriguez said.
Valarie Honeycutt Spears: (859) 231-3409. Twitter: @vhspears.