A lack of financial oversight and the use of one-time funds to support recurring costs contributed to Jefferson County Public Schools’ $188 million deficit, according to an independent assessment of the district’s finances from 2021 to 2025.
Many large purchases had been made at the discretion of former Superintendent Marty Pollio, without sufficient oversight from the finances department or the Jefferson County Board of Education, the assessment found.
“The district has not established a comprehensive governance framework outlining all budgetary roles, responsibilities, and decision-making authorities,” a draft assessment from audit firm Plante Moran said. “This has limited the district’s ability to establish strong checks and balances, as well as the processes needed to support coordinated and disciplined budget oversight.”
JCPS’ Audit and Risk Management Advisory Committee met Feb. 25 to hear a presentation from Plante Moran.
“It was very clear that there just was not enough governance to make sure that, basically, the finance office was involved in the large purchasing decisions,” board member Taylor Everett told The Courier Journal. “There were not things in place to stop purchases from being swept under the rug and not reported to the board.”
Everett said most of the audit firm’s findings “weren’t surprising” and confirmed suspicions about how JCPS fell into a $188 million deficit.
The assessment found that while JCPS’ chief financial officer technically had responsibility over the budget, he did not have practical authority to approve or deny budget changes endorsed by Pollio. The board also had limited insight into mid-year budget decisions, especially because monthly budget reports were no longer included on the board agenda after April 2023.
The assessment also found the district used temporary or nonrecurring funds, such as COVID relief money, to expand programs and staffing. For example, JCPS purchased Chromebooks during the pandemic with COVID money, but replacements had to be paid for through the general fund.
“Long-term financial implications were not consistently considered when new expenditures were added to the budget,” the assessment said.
More: Despite proposed cuts, JCPS will still carry deficit in next budget
Personnel additions and salary increases also contributed to the deficit. The firm found that one year, total pay for district staff jumped by $78.1 million, or 8%, despite a small increase in the number of staff. That change was attributed to an increase in teacher and bus driver salaries, as well as a bump in Choice Zone stipends and classified overtime.
Add-on funding for schools, mostly used for new school-based staff such as mental health practitioners or school safety administrators, increased by $137.8 million from 2022 to 2025.
The firm also found that the budget process did not consider the district’s long-term goals. Departments carried over the previous year’s budget and made incremental changes, rather than creating a plan from the ground up. New programs were approved in silos.
“Without a cross-departmental planning structure, new initiatives are not weighed against each other or against district-wide goals,” the assessment said. “There has been a cultural focus on addressing the upcoming year’s challenges instead of proactively shaping a multi-year strategy.”
For example, the district provided additional funding for schools that appear on the state’s Comprehensive Support and Improvement (CSI) list. District leadership developed a plan to phase out funding once schools came off that list. Despite that, six schools in fiscal year 2024 and nine schools in fiscal year 2025 — that weren’t part of the CSI roster — continued to receive funding totaling $4.1 million over the two years.
Budget investments were often not evaluated based on data but on “perceived student benefit,” the firm found.
Certain district staff did not receive sufficient budget training, especially new chiefs and department heads within central office. Principals are required to take budget classes, but those trainings focus on procedure rather than strategies for managing their school’s budgets, the firm found. There is no established training for central office administrators.
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When comparing to peer school districts, the firm found JCPS does not have any board policies requiring a balanced budget like other districts and JCPS has less extensive financial training than other districts.
The audit firm provided recommendations to address each of the eight high priority findings and five moderate priority findings.
Everett said more work is required to ensure JCPS doesn’t see another deficit of this size.
“I’m going to work with our legal team. We’ve got to put new policies in place to make sure this doesn’t happen,” Everett said. “I trust Dr. (Brian) Yearwood … but we’ve got to put things in place so that when he’s gone and the next superintendent and the next superintendent, this district does not have this happen again.”
Kathryn Muchnick covers children and education. Reach her at kmuchnick@usatodayco.com.
This article originally appeared on Louisville Courier Journal: No oversight, one-time funds contributed to $188 million JCPS deficit