Fayette School Board Discusses Fraud Allegations, Passes Budget

May 29, 2014

Credit Stu Johnson / Weku radio

    Allegations of mismanagement, fraud, and waste in the Fayette County School System were a "front and center" issue at Wednesday night's board meeting. 

Budget Director Julane Mullins made the claims this week in an email to board members.  She contends it is a 20 million dollar irregularity.  The board meeting opened with an in-depth presentation by the school district's Financial Services Department Director Rodney Jackson.  He told the board, "there is not 20 million dollars missing and there was never 20 million dollars missing."

He says the recording of finances is a complicated matter.  "What this means is there was simply a reclassification of money of funds, the fund balance never changed and there's no way it can affect the budget," said Jackson.

Bill Meyer is with the accounting firm who conducted an outside audit of the school system's finances.  He told Vice Chair Melissa Bacon no problems were found.

Julane Mullins did not attend Wednesday night's meeting.   While in session, board member Amanda Ferguson said Mullins had no reason to fabricate the claims, but says she still wants more information.  "When someone who's been with the district for 16 years and has been in that position, makes those claims, and has bothered to document things all along and obviously save emails and something alerted her at the time it happened and I still don't feel like I've fully be given an answer on that," said Mullins.

School Superintendent Tom Shelton, who is a former school district finance officer, says there's been no improprieties.  He says they were made in a timely manner and done correctly. 

Kentucky Auditor Adam Edelen announced Wednesday his office will review financial records of the Lexington school district.

The school board did approve a modified budget four to one with Amanda Ferguson casting the lone dissenting vote.  The final document was modified to restore about one and a half million dollars.  The budget still calls for more than 17 million dollars in reductions.