Fayette County school district changing procedures after critical state audit

The weaknesses in Fayette County Public Schools' budget and financial management processes and other issues that state Auditor Adam Edelen revealed in September "didn't occur overnight, and they won't be fixed overnight," he said recently.

But Edelen said he generally was satisfied with Fayette County's response, which district staff has been detailing in monthly reports to Edelen and the school board.

"While we share the eagerness of parents and the public to see results, progress has been steady," Edelen said.

After a special examination, Edelen released 10 findings in September that he said indicated "chronic mismanagement of the district's budget and finances that have contributed to financial instability."

Edelen had said accounting errors were contributing factors for the district's budget cuts last year.

Among the trouble spots were weaknesses in budget 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.

The district is reviewing policies and procedures regarding conflicts of interest, according to a report given to the board in March and sent to Edelen.

Kyna Koch, the district's senior director of administrative services, who was hired to resolve problems noted in Edelen's report, gave the board a written update that shows some initiatives to fix the problems have been completed.

Other improvements are still in process. Koch said a work group convened to look at issues regarding state-required accounting software was making numerous changes and improvements.

A work group also has completed an extensive review of district travel and professional development guidelines. Changes include clarifying that travel costs shall not be incurred beyond the duration of a conference or training, as recommended by Edelen.

An appraisal has been requested on the cost of expanding the scope of a salary study.

A new monthly financial report, including the current financial position as well as year-end projections, was presented at the March 23 board meeting.

One issue raised last year was whether the district's financial information was presented in a transparent way to board members.

"The new reports aim to give the board a better idea of where we actually stand financially at the end of the prior month," Koch said. "The new charts show revenue and expenditures by month compared to last year in the same month."

The report presented at the March 23 board meeting showed the district was slightly behind in revenue compared to last year but was spending less.

At the end of February, the district had spent less than it spent at the end of February last year, she said.

"We are doing a good job of cost containment," Koch said.

Additionally, a purchase order has been approved for a fraud hot line.

Koch and school board chairman John Price said Friday that they would like to see improvements at a quicker pace. The district has set deadlines to address all of Edelen's findings.

"I think we are making progress," Price said. "Probably not as much as I would like, but I think we are headed in the right direction."

This story was originally published March 30, 2015 at 4:23 PM with the headline "Fayette County school district changing procedures after critical state audit."