FCPS superintendent to launch internal review, pledges to cut costs amid budget woes

Amid severe budget woes in the Fayette County Public School system, Superintendent Demetrus Liggins said Friday he would launch an internal review of financial procedures and vowed to cut costs in the district.

“As you have probably heard in the news, our initial budget for the upcoming year was based on an estimated starting balance of $42 million. As we close out the previous year, we now expect that number to be lower,” Liggins said in a message to parents.

Liggins’ announcement came one day after the district said its contingency fund, initially estimated to be around $42 million, was closer to $15 million to $22 million.

The district is also facing a $16 million overall budget shortfall.

“I’m committed to working with our community to build back that trust,” Liggins told the Herald-Leader on Thursday. “I know that is something that, for whatever reason, has been lost, and I think a lot of it has to do with communication or lack thereof.”

Effectively immediately, Liggins said Friday the district will:

• Reassign the financial accounting, budget and benefits services department to report directly to him.
• Implement a mandatory hold on filling any district office vacancies.
• Limit all out-of-state or overnight professional development travel from the budget general fund to mandatory purposes only.
• Pause all maintenance projects unless they are directly related to health or safety.
• Hire retirees only for substitute teaching roles.
• Provide monthly public updates to keep the community informed.
• Launch an internal review of both current and past financial procedures to ensure best practices.

Liggins noted that a budget solutions work group convened this summer to recommend ways to address the district’s funding shortfall.

One of the group’s 10 primary recommendations was to use money from the contingency fund to fill that gap, but Liggins said that won’t be possible in the short term.

“Given our current circumstances, I will recommend that the board maintain only the state-required minimum contingency (of 2% of total revenues) this year. Any funds above that amount could then be considered when reviewing recommendations from the budget solutions work group.”

Board Chair Tyler Murphy said previously that the contingency fund will be among the topics discussed at Monday’s board meeting.

Kentucky Department of Education district spokesperson Jennifer Ginn said school districts must submit a tentative budget by May 30 and a working budget by Sept. 30. Those budgets are checked to make sure districts are following the minimum 2% contingency fund balance. Fayette County’s tentative budget on May 30 met this requirement, Ginn said.

“KDE is always willing to aid districts that reach out for support. Fayette County has not asked KDE for additional support on its budget,” Ginn said.

The superintendent has said there are several areas where expenses are outpacing revenues.

On Friday, in an attachment sent with the message to parents, the district said its beginning balance for the upcoming year is less than expected because of “timing, accounting procedures and unexpected shortages in child nutrition and preschool funding” from the previous year.

In the area of nutrition services, or school meals, Liggins has said there is a challenge because the revenue coming in hasn’t kept pace with inflation. The district has said it has $4 million in cash on hand in that fund.

The district explained that “a combination of inflation and state rules forced the general fund to cover child nutrition costs. Reimbursements will be too late to count in the Carry-forward and may not come at all.”

Transportation expenses for preschoolers are also a pressure point for the district, which said previously it needs about $2 million more than the district expects to receive.

The district said a state grant is supposed to reimburse the district’s general fund for those transportation costs, but “state funding has not kept up with increased costs.”

The district has also said it needs about $2 million more for retirees who have come back to work as substitute teachers.

On Friday, the district explained that employees and the district each pay in to the state retirement system for educators, and more money for that was needed during the last school year than in the year before.

“Since payment calculations are individualized, those contributions are regularly reviewed,” the district said in the document sent to parents. “Discrepancies are billed, and that amount is deducted from the carry-forward. The estimated total for 2024-25 is $2.7 million compared to roughly $255,000 in 2023-24.”

Liggins said he will be working closely with the school board’s budget and finance committee and convening a long-term work group to begin meeting no later than the beginning of September.

“In the past, we have failed to communicate budget and finance information in real time, and I have publicly pledged to do better going forward,” Liggins said. “Inflation and budget crisis are happening to school districts across the nation and right here in Kentucky.

“Although we find ourselves in a better position than many of our peers, this challenge must be addressed.”

Herald-Leader reporter Karla Ward contributed to this article.

This story was originally published August 15, 2025 at 6:43 PM.