District cites ‘significant budget shortfalls’ as Fayette Schools CFO loses job.

Citing failure to inform her about “projected significant budget shortfalls”, acting Fayette Superintendent Marlene Helm is not renewing the contract of the school district’s chief financial officer.

In response, John White told the Herald-Leader in a Monday e-mail, “There is more to this story, but I am not prepared to address the non-renewal and the claimed reasons at this time.”

In a June 7 email to John White that the Herald-Leader obtained under the Kentucky Open Records Act, Helm listed several grounds on which his contract was not renewed for the 2021-22 school year. White had requested that information. Helm cited:

▪ A lack of a coherent and inclusive budget approval process including, but not limited to, failure to advise the Superintendent of Cabinet budget requests and a failure to discuss the tentative budget with the Superintendent and/or the Cabinet as a whole.

▪ An inability to articulate what is and is not included in the tentative budget.

▪ A failure to inform the Superintendent of projected significant budget shortfalls due to decreases in funding in the areas of food service and pre-school.

▪ A Budget and Finance Committee that was unstructured in its meeting regularity, its purpose, timely agendas, and ultimately, its work.

Helm told White in the email that he remained eligible for rehire and encouraged him “to apply for any vacancies of interest with Fayette County Public Schools as they become available.”

Fayette County Public Schools does not comment on personnel matters, said district spokeswoman Lisa Deffendall.

Deffendall explained the reference to the projected budget shortfalls, which she said the school board discussed at a budget presentation at its May 24 meeting:

“Like many school districts across the country that continued to feed children while schools were operating remotely, Fayette County’s cost of providing food service was not fully covered by the existing federal reimbursement rules,” Deffendall said.

“By utilizing federal pandemic relief funds along with the reserves maintained by the Child Nutrition Department, this deficit will be corrected without impacting the district’s general fund operating dollars,” she said.

Deffendall said district officials anticipate that state funding for its preschool program during the 2021-22 school year will be short because the state is basing those dollars on student enrollment for the 2020-21 school year and officials expect preschool enrollment numbers to increase during the 2021-22 school year.

Since the state budget for the first time includes funding for full-day kindergarten, the district will use some of the local dollars previously allocated to provide full-day kindergarten in the district to make up the difference in the preschool budget, Deffendall said.

It was unclear Monday who will replace White, who was hired a few years ago by the late Superintendent Manny Caulk.

At the May 24 school board meeting, Kyna Koch, who worked as a consultant to fix district finances when it had problems before Caulk’s tenure, helped present the tentative budget. White did not appear at that meeting.

The email from Helm to White showed that the two had met about Helm’s concerns on May 14 and he received an email that day that his contract would not be renewed. In that email, Helm said board members would be told about the non-renewal at the May 24 meeting.

Just prior to that private meeting, school board members publicly discussed the need for transparency in how the district would spend the unprecedented millions it was receiving in federal dollars to recover from the pandemic.

Helm said at that time district officials were considering hiring someone who would make sure that Fayette County Schools’ spends its millions of COVID stimulus dollars “in the most efficient way.“

She said then the new superintendent hired this month will likely choose the person to manage federal money. Fayette schools previously had a state and federal grants manager who oversaw funds and now that position could be brought back, Helm said.

According to the May budget presentation, the district’s total tentative budget for 2021-2022 is $821.8 million. State and federal grants awarded to the district -- including federal COVID dollars earmarked only for pandemic problems-- is about $153 million, officials said at that presentation.

The school board had to approve a tentative budget by May 30 under the law.

In April, White told school board members that despite getting the millions in federal COVID stimulus money, Fayette schools would ultimately face a future budget deficit if the school board doesn’t raise property taxes. The board has not committed to a higher rate. The stimulus money can not be used for daily district expenses and is earmarked only to ease problems caused by the coronavirus.