Fayette County schools doesn’t know how much it will tap from surplus to balance books
AI-generated summary reviewed by our newsroom.
- The district's contingency fund is currently $27 million but may change.
- The district approved a $711.4 million tentative general fund budget beginning July 1.
- Fayette approved a $95 million short-term loan to cover payroll until tax collections.
Fayette County Public School officials said Monday the school district still doesn’t know how much money it will take from its contingency or rainy day fund to balance its books for the fiscal year that ends June 30.
FCPS Acting Executive Director of Finance Amy Smith said during the board’s Monday planning meeting the current contingency fund is $27 million. However, that figure will likely change as the district tries to close its books for the current fiscal year and untangle several years worth of misstated financial statements.
Smith said it may not be known how much the school district will need to take from the contingency fund before the board takes its vote at a June 22 meeting.
Fayette County board member Monica Mundy asked when the school board will know how much money will be taken from the rainy day or contingency fund.
Smith said it may be as early as July.
Board member Amanda Ferguson said in prior years, the board was not always told when the school district had to use surplus or contingency funds to balance its books. The school must maintain a contingency fund of about 2% by state law. It’s not known if using the contingency fund will drop the district below that 2% threshold.
Schools look to fix financial turmoil
The move comes as Kentucky’s second-largest school district tries to right its finances after discovering earlier this year that its books had been misstated for decades.
The district recently approved a $711.4 million tentative general fund budget for the fiscal year that begins July 1. The 2027 budget has a contingency or rainy day fund of $11.4 million.
That budget includes the elimination of 120 positions and cuts to other staff working days. The district has said teacher positions have not been affected by the cuts to positions and working days.
In addition to cuts, the school district is also borrowing money.
The Fayette County Board of Education also recently approved a $95 million short-term loan to help it cover its payroll for the fiscal year that begins July 1. That loan will be repaid when property and other tax collections come in this fall, district officials have said.
Smith and Acting Chief Financial Officer Kyna Koch has said the district will have to restate its financial statements for fiscal year 2025 and 2026. Koch was hired to fix the district’s finances after repeated questions were raised about its bookkeeping and financial health over the past two years.
In May, Smith showed the board that property, motor vehicle and occupational taxes, a tax on wages, were grossly overstated in 2025. The vast majority of the district’s funding comes from local property taxes. In 2025, all local taxes were overestimated by $8.5 million, according to documents shared with the board.
Smith said they are still working through re-stating the 2025 books.
