‘Fraud, waste, mismanagement.’ Former FCPS accounting employee files lawsuit

A former Fayette County Public Schools accounting employee who was transferred and then terminated has filed a lawsuit against the school district Monday alleging she was retaliated against for reporting mismanagement and illegal activity.

Mira Beth Muth’s lawsuit is filed in Fayette Circuit Court against the school board and Fayette County Superintendent Demetrus Liggins, who is now himself on paid leave -- starting in June -- while his employment is reviewed.

The lawsuit said Muth, an employee from 2023-26, was transferred in retaliation for reporting fraud, waste and mismanagement and ultimately terminated after reporting the problems to Liggins.

The school district recently revealed that its finances had been misstated for more than a decade.

“The true reason Plaintiff was reassigned was because she had pointed out, on numerous occasions, actual or suspected fraud/waste/mismanagement of District funds in the grants,” the lawsuit alleged

District spokesperson Miranda Scully said Tuesday that FCPS officials do not comment about pending litigation or ongoing legal matters.

What the lawsuit alleges

Muth, who lives in Fayette County, was employed as the district wide manager grants accounting for the Fayette County Public School District from 2023-2026.

During this period she told her supervisor, now-retired executive director of financial accounting Rodney Jackson, that the district was noncompliant in effectively distributing and/or refunding the funds in their grants, the lawsuit says.

She also told him the district was illegally moving money between Fund 1, which comes from tax payments and SEEK) the school funding formula from the state), into Fund 2, which comes from grant-related funds and donations. The was done to free up money in Fund 1, the lawsuit says.

“During this period, Mr. Jackson would consistently tell Plaintiff that she was “going to(o) deep” into the grants. Additionally, Plaintiff was instructed not to answer emails without Mr. Jackson’s explicit permission and told not to ask any questions to the Kentucky Department of Education without prior approval,” the lawsuit said.

Jackson told Muth in January 2025 that there was “a target on her back,” effectively threatening Muth due to her reporting of the district’s mismanagement of their grants, the lawsuit said. She was reassigned to the tax department.

On March 24, 2026, Muth told Human Resources Director Jennifer Dyar that she had concerns with how financial information was being presented to the school board and to the public.

Specifically, she stated that, since the grants were not being properly managed, the information presented to the board was inaccurate and misleading. She also informed Dyar that she had been instructed by Jackson not to share certain information that she was working on for the board and for Liggins.

She said that the general, unstated rule had become not to include any information pertinent to financial issues in emails, the lawsuit said.

The lawsuit alleged Liggins was “feigning complete ignorance of the District’s poor financial affairs.“

Acting Chief Financial Officer Kyna Koch, the lawsuit said, asked Muth how long the school district had known about the budget deficit. Muth told her as early as March 2024.

Muth was later informed that she was removed from her position because the district needed “less hands in the pot” – signaling to her that the district had scaled down the department and eliminated her position, the lawsuit said.

But the lawsuit says Muth’s position still exists, it just hasn’t been filed.

On March 28, 2026, Muth received a call from Rodney Jackson asking her to gather information for an open records request that was related to indirect costs taken out of the Fund 2 grants, according to the lawsuit.

During this call, she was instructed to share the information orally, and explicitly told not to share the information via email. She disobeyed this order and shared the information via Google Share, the lawsuit says.

“The true reason she was reassigned was because she had pointed out, on numerous occasions, actual or suspected fraud/waste/mismanagement of District funds in the grants,” the lawsuit said.

“Emails and spreadsheets demonstrate Muth’s good-faith reporting of the grants’ reimbursements and expenses and how that information was inaccurately being presented to the (Fayette County Board of Education), as the grants had not been properly managed and closed out for several years,” the lawsuit said.

Muth told Jackson she had been trained to put tax payments which did not include the necessary tax number on either the check or in the form into a U.S. mail tote to be processed “at a later date.”

Those totes filled nearly the entire room, the lawsuit said

“Whether these checks were not being processed due to employee disgruntlement, incompetency, or fraud, Plaintiff does not know. However, the fact that the checks were not being processed demonstrates clear waste/fraud/mismanagement of district funds,” the lawsuit said.

“In spite of her good-faith reporting, no steps had been taken by the District to resolve this clear instance of waste/fraud/mismanagement,” the lawsuit said.

The lawsuit said Muth shared information regarding waste/fraud/mismanagement with unprocessed tax checks, and the validity of the financial information shared with the public with Liggins in April.

She expressed to him “it was like a shell game,” and that the district was constantly moving money to inflate numbers.

Liggins thanked her for being brave enough to come forward, the lawsuit said.

“He stated that she had shared information which he had, allegedly, not been aware of prior,” the lawsuit said.

On April 28, 2026, Muth learned that her contract had not been renewed.

She underwent a psychological evaluation where she was diagnosed with PTSD, which was directly attributed to her employment with FCPS, the lawsuit said.

Following her report to Liggins, Muth “was terminated mere days later, in retaliation for her good-faith reporting,” the lawsuit said.

Muth is asking for her job back and substantial compensatory damages in an amount to be determined by a jury.

Another employee’s lawsuits

Former FCPS budget director Ann Sampson-Grimes has filed two lawsuits against the school district.

The first, in September 2025, alleged she was placed on leave because she repeatedly alerted her bosses last year that the district’s financial state was flailing and would worsen in 2025.

The second, filed last month, alleged she was improperly demoted and reassigned.

The attorney for both Muth and Sampson-Grimes is Brandon Voelker.

This is a developing story and will be updated.

This story was originally published July 14, 2026 at 10:43 AM.