How bad was FCPS bookkeeping in 2025? They made more than $8.5M in mistakes

Fayette County Public Schools officials confirmed Wednesday they overestimated how much money they would get from taxes and state funding, contributing to the district’s significant financial problems.

Chief Interim Financial Officer Kyna Koch told the Fayette County Board of Education that in fiscal year 2025, the district grossly overestimated property, motor vehicle and occupational taxes.

The total amount of the tax revenue overstated was more than $8 million.

In addition, there were other errors in the revenue being reported in fiscal years 2025 and fiscal years 2026. Koch and her team have been examining the school district’s books for months to determine why the district’s finances are in disarray. Koch and Fayette County Superintendent Demetrus Liggins announced in April the school districts’ revenues and expenses have been misstated for years. The board approved a tentative $711 million general fund budget on Wednesday for the fiscal year that begins July 1. That budget includes the elimination of 120 positions and cuts to working days to save money. The district has said teacher positions have not been affected by the cuts to positions and working days. Wednesday was the first time the school district released figures on how much its revenues have been overstated in past years. Three people in the finance division have since been placed on either administrative or medical leave. The district has not released those employees’ names. Some of the problems Acting Executive Director of Finance Amy Smith reported for fiscal year 2025 include:

• Property tax revenue was overstated by $4.37 million
• The occupational license tax revenue was overstated by $3.6 million
• Motor vehicle tax revenue was overstated by $252,410
• The money from SEEK, Kentucky’s schools’ main funding formula, was overstated by $717,625
• The FCPS general fund was overstated by $4 million for grants.

In a special revenue fund, which includes grants, the district found approximately $500,000 in discrepancies to date. Those discrepancies were tied to overspending or failure to meet deadlines for fund requests.

The overstatement of $252,410 for motor vehicle taxes happened because the same amount was reported twice in fiscal year 2025.

In another instance, a $2.41 million amount was reported in fiscal year 2025 and then again in fiscal year 2026, and the duplicate wasn’t removed until April 2026.

The district also duplicated one $172,799 listing for delinquent taxes. The figure was reported in FY 25 and again in FY 26, and the duplicate was removed in April 2026.

‘Recovery is going to take awhile’

FCPS Board member Monica Mundy thanked Koch and Smith for working diligently to restate the district’s finances, but said she was troubled by the extent of the problems. “What I’ve seen tonight is shocking, but I am not surprised,” Mundy said, adding Koch had repeatedly warned the board the district’s financial statements would have to be restated.

At a Thursday news conference, Koch said, “I think that recovery is going to take a while.”

“We are digging into the layers of our finances and trying to get everything straightened out,” Koch said.

“We’re correcting the errors in the current year and ensuring that all processes are being followed,” Koch said. “We are looking back at the previous year to uncover errors and restate those so that we will have good historical information as we move forward. And thirdly, we’re planning for next year with accurate projections and reductions that protect the classroom. “

School board approved pay raises

Koch said Wednesday that problems occurred in the budget because the school board approved two jumps in salaries.

“The basis of the problem were the two increases in salary schedules and we need some time now to pause those salary schedules and let our revenue catch up,“ Koch said.

“Our revenues did not keep up with the expenditures that were approved by the board,” Koch said.

She said the stated amounts of the contingency, or rainy day fund, for the last year or two also were not accurate.

Koch has previously said the district will have to restate its finances for fiscal year 2025 and fiscal year 2026.

For fiscal year 2027, district officials say, the contingency fund is at 2%, which is the state minimum.

In face of calls for resignation, Liggins promises to ‘right the ship’

At Thursday’s news conference, Liggins addressed multiple people coming forward at Wednesday’s school board meeting calling for him to resign or be fired.

Liggins says he has had to make very difficult decisions amid the finance issues, including cuts to 120 jobs.

“When we’re in a financial situation and you’re having to make tough decisions, emotions are very high. And I certainly recognize that. And that is something that was evident last night,” Liggins said.

Liggins said he is also receiving messages of support.

“My focus right now is working on ensuring that we right the ship, we get our financial house in order, and that we continue to do what’s best for kids to move forward,” said Liggins. “I’m not interested in politics. I can’t deal with personal opinions and feelings at this point. My focus remains on doing what’s best for this district.

“Unfortunately, that requires tough decisions. As a superintendent, I am the face of the district and that does come with accountability, but my focus certainly right now, again, is to remain on focused on getting our financial house in order and ensuring that we have as minimal impact on students as possible.“