Six-figure contract never went to board and more missteps for Fayette schools
Fayette Schools Interim Chief Financial Officer Kyna Koch said district officials have found a six-figure contract for financial services that never went to the school board or the superintendent, she said Monday at a standing-room only school board meeting.
That contract was being paid out of an instructional account, although it was not providing instructional services and was not properly accounted for through accounts payable and purchasing processes, Koch said.
Koch said FCPS has often operated outside of the state, federal and accounting practices and financial records have been fundamentally misstated for years.
“I helped develop and enact those processes when I worked for the Kentucky Department of Education, and I’m disappointed to tell you there are multiple instances, instances where FCPS has simply not been compliant. To ensure accuracy and prevent fraud, there should be internal checks and balances,” she told the school board. “We found instances where those internal controls and oversight were bypassed. All transactions should have at least two people involved, one that enters and one that approves. We found multiple transactions where one person enters and the same person approves and posts the transaction. “
“I hate that we find ourselves in this position,” Fayette Superintendent Demetrus Liggins said in the meeting that punctuated what he and Koch said last week: Those inaccuracies and misstatements have plagued the district finances for years.
Koch said she had seen a pattern of money being moved from one account to another to cover expenses.
“The money’s not missing, but it’s not being spent on the things that was intended to, and it may not be coded in the correct accounts,” she said. “That’s a problem because a lot of the money that comes into the district is dedicated revenue streams that are supposed to be spent on specific things. There’s also been a loss of revenue due to missed deadlines.
“As you know, most of our federal grants are on a reimbursement basis where the district spends the money and then we ask the federal government to, cover the expense. There were instances where a significant amount of dollars were not recouped because of missing the deadline for the reimbursement request.” “Overall, I do not have confidence in the monthly financial reports given to the superintendent and the board,” Koch said.
Koch also said the district frequently missed federal reimbursement deadlines.
Koch did not say how much money FCPS missed in federal reimbursements.
She said the problem with a dwindling contingency fund is more significant than the superintendent and the board were led to believe. Things that should not be counted in the fund balance were included in the numbers Liggins and the board were given, Koch said.
“No leader, superintendent, or board member can make sound decisions if the information presented to them is inaccurate, incomplete, or deceptive. While our immediate financial picture is sobering, uncovering the truth is the mandatory first step,” Koch said.
Multiple people in the community spoke at the meeting, some heavily criticizing Liggins and the board for not acting sooner and others asking the board to dig in to whether corruption had occurred.
Board members acknowledged with a vote that the monthly treasurer reports they had received for February and March were inaccurate.
“I have taken deliberate steps to gain a complete understanding of our financial challenges and continue leading the work necessary to address them responsibly,” Liggins said in a statement the district released during the meeting.
With the district in financial upheaval and job cuts just announced, Fayette County Board of Education Chairman Tyler Murphy on Monday removed the issue of increasing the cost of school meals from Monday’s school board agenda.
Murphy said it was “important for the board and the community to get the full picture of our district’s financial status before the board considered student meal prices.”
Murphy made the announcement at the beginning of the 6 p.m. meeting, where a standing room only crowd gathered to hear more about how bad the financial problems are. Just hours earlier, Superintendent Demetrus Liggins told FCPS employees and the district community that jobs cut and hour reductions were coming in order to address budget issues.
While announcing the financial issues, Liggins said last week that two Fayette County Public Schools finance employees are on paid leave pending the results of investigations into the district’s budget problems. A third also is on medical leave, Liggins said. District officials declined to identify those employees.
School meal prices were another aspect of financial issues. District officials had said they needed to increase school meal prices because they had a negative food fund balance on June 30, 2025. The food fund has a $1.5 million deficit.
Liggins said the number of teachers and paraeducators at the school level are not impacted as part of this reduction.
“These decisions impact real people. Real families. Real livelihoods,” Liggins said to staff in an email. “They affect individuals who have poured their hearts into this district and the children we serve. I do not view any of you as numbers on a spreadsheet, positions on an organizational chart, or expenses to be reduced. You are human beings. You are professionals. You are valued members of Team FCPS, and I fully understand the weight that moments like this carry.”
Kentucky Department of Education officials said Monday before Liggins announced the cuts that they’re monitoring the situation. Kentucky Auditor Allison Ball told Herald-Leader reporting partner WKYT Monday she is essentially conducting a forensic audit on FCPS.
“It’s almost like being a detective,” Ball said.
Laura Hartke, an organizer with the teacher’s union KY 120 AFT is calling on board chair Tyler Murphy, vice-chair Amy Green and Superintendent Demetrus Liggins to resign, citing district “incompetence and wastefulness.”
“The entire community has been bringing these issues up for almost two years now and every single person who tried to bring it up was accused of spreading false narratives or treated as if they were too stupid to understand what was happening,” Hartke said in a Facebook post over the weekend.
Officials with the Fayette County Education Association, which represents teachers, said they want those who are at fault for FCPS’ current fiscal fiasco to be held accountable but also said the district has more to do to figure out what went wrong when and who is responsible.
“We want those at fault to be held accountable. We also want to ensure that our school district and our community come out of this with a clear and united vision for FCPS’s fiscal and educational future,” said Erika Pennington, president of the FCEA. “ This is not the time to add fuel to the fire with rumors and finger pointing. It is time to tamp down such talk and provide real and meaningful solutions.”
The district acknowledged last year it was facing a potential $16 million budget shortfall, and a contingency fund that was expected to be big enough to fill that gap actually held much less money than expected, district officials said in August last year.
The school district has contracted with the Texas accounting firm Weaver and Tidwell to conduct an audit of Fayette County Public Schools, and results are still pending. State Auditor Allison Ball is also conducting an investigation. Other investigations, already completed, have found systemic issues with the way FCPS handles its budgeting.
This story was originally published April 27, 2026 at 7:06 PM.
