More excellent reporting from Valarie Honeycutt Spears in H-L:
Three members of the Fayette County school board pledged support Wednesday for Superintendent Tom Shelton in the wake of a state report that outlined financial mismanagement and other problems at the district.
But two other board members expressed reservations about Shelton's ability to lead the district.
Daryl Love said in a statement that he was pleased to hear that no money was missing and there hasn't been any criminal activity.
He said he looked forward to working with Shelton and the board to "address the valid audit findings."
Meanwhile, a teachers group expressed concerns about how the district spent some of its money.
The audit released Wednesday by State Auditor Adam Edelen detailed weaknesses in the district's 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.
At a news conference Wednesday, Shelton outlined several key steps he planned to take to address the problems identified in the audit, including hiring two outside consultants and restructuring the finance and budget divisions.
School board Chairman John Price said Wednesday that he supported Shelton and that the school system is already making changes to address problems mentioned in the audit. Price emphasized repeatedly that the audit showed no criminal wrongdoing and that no money was missing from the district.
Also firmly in Shelton's corner is Melissa Bacon, vice chairwoman of the board.
"I have every confidence that the superintendent is going to put a plan in place to implement the recommendations (contained in the audit)," Bacon said after Wednesday's news conference. "Everything in that report is fixable. And I have every confidence that he will be able to do that."
But board members Doug Barnett and Amanda Ferguson said the audit showed problems with leadership at the second-largest school district in Kentucky.
After Edelen's news conference Wednesday morning, Barnett said Shelton had "failed miserably."
Barnett said that at this point, he would not vote to renew Shelton's contract when it ends in June 2015. Shelton has been superintendent since 2011.
Ferguson said she, too, had reservations about Shelton's ability to continue as superintendent.
"I have serious concerns about his ability to lead us where we need to go," Ferguson said.
For months, Ferguson has asked questions about why the budget had to be cut and why board members weren't given more financial information. She said Edelen's findings answered her questions.
"It finally answered questions I had in the spring," she said. "It's sad for our schools when we are talking about the questionable actions of adults instead of the achievement of our students. We've got to find a way to move forward to help our students."
"The superintendent and the finance director engaged in a course of conduct designed to mislead the school board and the public with respect to the health of the district's financial position," Barnett said.
Bacon, though, said she didn't think the board was kept in the dark, noting that the board's role is oversight.
"As board members, we are suppose to be overseers, not micro-managers, so there is a balance there," Bacon said.
Price said the district had outside auditors, and that Shelton had been working on the budget problems before the state's audit.
Both Shelton and Price are certified public accountants, but Price said he didn't think he or Shelton had to check the math when handed working budgets and financial statements by district officials.
Barnett said budget director Julane Mullins was "brave" to publicly make allegations that led to Edelen's audit. Mullins — who has worked in the district's budget office for 16 years, including 10 as the director — sent an email to the board, and Edelen, containing several allegations, including that the district's current $20 million shortfall was caused by irregular accounting but worsened with "numerous acts of mismanagement."
At the time, Shelton denied those allegations, and he maintained that position Wednesday. But Shelton said that ultimately, he takes responsibility for the problems between the finance and budget arms of the school district.
Barnett said Shelton is paid "handsomely," and when the budget process is flawed, "that's ultimately on the superintendent."
Price said Wednesday that the school district does have to make key changes.
As for the budget department and the financial-services division, Price said, "We certainly have to reorganize how those departments work."
Meanwhile, the teachers group said its members were concerned about portions of the audit showing that money from a special trust fund was going to pay for travel expenses rather than for educational needs.
Fayette County Education Association president Jessica Hiler said she thought Edelen's special examination showed that money was being diverted from the classroom to the administrators. The education association is a voluntary organization for teachers.
"That's really troubling, because that's where our money needs to be. When you've got teachers out there that can't buy supplies for their classrooms because there's not enough money going to their schools, that's the most troubling for me."