State auditor wants new Fayette superintendent to focus on problems highlighted in audit

Fayette County Public Schools central offices at 701 East Main Street, Lexington.
Fayette County Public Schools central offices at 701 East Main Street, Lexington. Herald-Leader

After receiving Fayette County Public Schools' plan to fix chronic financial mismanagement, a spokeswoman for Kentucky Auditor Adam Edelen said Tuesday that Edelen hopes "the next superintendent and the board will make addressing our concerns a priority."

In a 64-page report released in September, Edelen had said accounting errors were contributing factors for the district's budget cuts this year.

The audit detailed 10 key findings, including weaknesses in budgeting and financial-management processes, administrative and management salary increases that outpaced those of other district employees, excessive and unnecessary travel, misuse of a trust fund, and conflicts of interest.

Although the district has responded at various junctures to the report since September, Superintendent Tom Shelton sent Edelen's office an official 60-day response last week with updated answers. Shelton is resigning next month to become executive director of the Kentucky Association of School Superintendents.

"We will continue to monitor the district's financial situation, making sure taxpayer dollars are being spent wisely and are properly accounted for," Edelen spokeswoman Stephenie Hoelscher said.

"Although the district fulfilled its obligations to the auditor's office with the 60-day response, we have been and will continue to be in contact with district officials who are working to implement our recommendations."

Edelen's special examination cost the district $94,801, Fayette County school officials have said.

Hoelscher said Edelen appreciated the district's response.

"We also understand the superintendent transition may affect the timeline for implementation of our recommendations. But it is our hope the next superintendent and the board will make addressing our concerns a priority," she said.

School board members decided last week that the district's implementation of changes as a result of the audit is a top priority for the interim superintendent, who is expected to be named before Shelton's last working day on Dec. 12.

School board chairman John Price said Tuesday that the audit will be a priority when the board interviews interim candidates at noon Thursday and 10:30 a.m. Friday.

Price said the board approved the district's final response on Nov. 10, with instructions to district officials to report back to the board each month. The district's final response addresses the audit's findings of weaknesses in the budgeting and financial management processes.

Shelton said in the response that the district would wait until an assessment in January by the state's school accounting software company before deciding on some specific changes.

Kyna Koch, a consultant helping the district address Edelen's concerns, will reserve most of her recommendations for changes in processes, policies and procedures until after the software company's review.

The same is true for recommendations on any organizational and structural changes that might be needed to make the district more effective and efficient, the district response said. Such recommendations are expected to be in place by April 2015.

The district made an official response to each of Edelen's 10 findings, saying that most corrections will be made by July 1. For example, a nepotism policy will be developed and presented to the board by July.

A board policy also is expected by July regarding the district's payment of employee memberships in professional and civic organizations.

Edelen's audit found that the district had paid for 10 memberships to an affiliate of the Urban League of Lexington-Fayette County and that Rodney Jackson, the financial services director, was the treasurer of the Urban League. The total payments to the nonprofit for the period under the examination were $2,650, Edelen's report said.

In a written response in September, Shelton said the memberships of $50 each give employees access to training and professional opportunities at no additional cost and that members of the Urban League provide mentoring and scholarships to Fayette County students.

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