The Fayette County school board restored some controversial cuts to the 2014-15 tentative budget before approving it 4-1 Wednesday night.
The tentative budget, now about $428.4 million, has been the subject of debate for months among parents, students and teachers. The board approved the budget even though some parents asked members to wait until Kentucky Auditor Adam Edelen completes an examination of allegations made this week by the district's budget director that an irregularity in accounting led to a budget crisis.
The cuts to the budget now total about $17.5 million instead of the $19.1 million Superintendent Tom Shelton proposed in April. The adjustments the board made at Wednesday's meeting included:
■ Restoring cuts to band and orchestra programs.
■ Limiting reductions to the district's special schools and programs to 3 percent
■ Changing the staffing reduction for classified employees — such as bus drivers and maintenance workers — from 5 percent to 3 percent.
■ Restoring $56,000 for trips and activities for students who receive free and reduced-price lunches and otherwise could not afford to participate.
■ Increasing the reserves for the district's special education program from $1 million to $2 million. A proposal to cut 97 aides and add seven special education teachers remained.
■ Limiting the number of paid days that could be cut for an individual employee to five.
Wednesday's meeting was necessary because the board did not approve the budget May 19 after members Doug Barnett and Amanda Ferguson objected to cuts, including those to orchestra and band programs. Barnett changed his vote Wednesday, joining Melissa Bacon, Daryl Love and board Chairman John Price in voting yes. Price voted via videoconferencing from his hospital room at the Markey Cancer Center, where he is recovering from a bone marrow transplant.
Ferguson voted no. She said she was pleased about the restoration of budget cuts. But she said that District Budget Director Julane Mullins' allegations raised serious issues.
"I cannot completely disregard Ms. Mullins' 16 years of experience in the district budget and staffing office, particularly since she has absolutely no reason to fabricate these claims," Ferguson said. "In fact, she makes them at particular risk to her own professional reputation and likely with extreme personal discomfort."
By approving the budget, the board met a May 30 deadline to submit a tentative budget to the Kentucky Department of Education. The board must approve a final budget by Sept. 30, and Shelton said there could be more changes depending upon revenues the district received.
The process that the district went through to get an approved budget was good, Shelton said, though it was challenging, creating "some emotional discussions" and "difficult conversations."
Earlier Wednesday, the presidents of two Fayette County Public Schools employee groups said they could not support the passage of the district's tentative budget until Edelen finished "special examination" into allegations of a $20 million irregularity in the Fayette Schools' budget. Edelen spokeswoman Stephenie Hoelscher said Wednesday that "this week we will send in auditors and begin gathering documentation, and we'll begin putting together the scope."
Fayette County Education Association President Jessica Hiler and Fayette County Education Support Professionals Association President Doug Botkin issued a joint statement Wednesday, saying "we cannot support the passage of any budget until this audit is complete." FCEA is a voluntary association that represents teachers. FCESPA is a voluntary association representing other school employees.
"Our members believe it is important that the community fully understand the reasons for the $20 million shortfall, so that we can be sure it does not happen again," the statement said.
Mullins said the district's current $20 million shortfall was caused by irregular accounting but worsened with "numerous acts of mismanagement," according to an email sent to school board members, as well as Edelen.
Mullins' email said a $20 million journal entry in 2011 was "irregular" because Rodney Jackson, the district's director of finance, made the entry on Dec. 6, 2011, six months after it should have been included.
Mullins said the late entry caused the working budget for 2012-13 to be approved by the board with numbers that were inflated by $20 million.
Shelton denied the allegations, as did Jackson in a presentation to the board at the meeting. Jackson told the board that $20 million was never missing. Jackson and Shelton, whose spending was also questioned in the email, said Mullins' accusations stemmed from misunderstandings of routine budgeting procedures.
Shelton reiterated after that the board meeting that the $20 million journal entry that Mullins mentioned had nothing to do with the $20 million budget reduction, which was due to the district overspending its revenue. Jackson said the journal entry did not affect the fund balance of Fayette County Public Schools either before or after the transaction. The district's outside auditor told the board that he had reviewed the allegations and Jackson's documentation and that there were no improprieties.
Jackson provided documents which he said showed that there was no erroneous or abnormal transaction. Mullins' attorney, Brenda Allen, has said Mullins was willing to share 1,000 pages of documents with investigators.
Attorney and former state lawmaker Bill Lear and business leader Mike Scanlon were among those asking the board to approve the budget despite the allegations.
In addition to Edelen's office, both Mullins and Shelton have asked the state Office of Education Accountability to investigate. Karen Timmel-Hatzell, OEA's acting director, said her office, which looks at violations of laws affecting schools, will wait until Edelen finishes his investigation "because we don't want to duplicate effort when we are all going to be looking at the exact same thing."