State auditor to look into Fayette County School finances

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LEXINGTON, Ky. (WKYT) - Calling it "clouding the issue of the budget," Fayette County Schools Superintendent Tom Shelton says there is no truth to allegations the district's $20-million budget shortfall is because of "irregularities" brought to light Tuesday.

State Auditor Adam Edelen announced Wednesday his office would conduct a special examination of recent financial mismanagement allegations. A timeline for completion has not been set for that investigation.

"There is no irregularity to the budget," said Dr. Tom Shelton, the superintendent, to media in a news conference late Tuesday afternoon. "I have to believe there's just some misunderstanding. There has been no mismanagement at all."

The concerns were raised by the director of budget and staffing at Fayette County Schools and was released in an email to school board members on Monday.

In the email from Julane Mullins to board members and the state auditor's office, Mullins says the irregularity was with a 2011 budget entry for $20-million which was made six months late allowing board members to approve the next budget year with inflated numbers.

"I feel compelled to provide this information to the board to shed light on the facts surrounding the current budget crisis and suspected violations of law and numerous acts of mismanagement, fraud, waste and abuse of authority that have resulted in the current state of affairs," Mullins wrote in the letter.

She said she notified Shelton of the issue, but it continued.

"He said, 'Are you telling me the budget for the last two years has been inflated by $20 million with recurring expenses?' I indicated, 'Yes.' Once Tom was made aware of the dire situation on October 18, 2012, he failed to advise the Board or to take immediate and decisive steps to address the critical financial situation that faced the district."

Shelton said the school system would conduct a full investigation and cooperate with the Office of Education Accountability and the State Auditors Office.

"As I told our school board, I'm astounded by the allegations that have been made by one of our employees. The allegations in the memo are untrue. Mischaracterization is a very routine accounting procedure," said Superintendent Shelton.

Kentucky Auditor Adam Edelen's office says they have received this correspondence, and they are currently reviewing it.

Debate over the $20-million shortfall and how to make cuts to make up the shortfall has sparked controversy among board members, teachers, and parents.

The superintendent sent out an email to parents in the school district about the matter, still calling it all a "misunderstanding" and nothing to worry about.

"I have to believe that there's just a misunderstanding here or some type of information that she's looked at that's not complete," said Dr. Shelton.

Board members will meet again Wednesday evening to discuss the budget.

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