LEXINGTON, Ky. — Fayette County Public Schools board members heard findings Monday from a Texas audit firm detailing significant control weaknesses in the district's financial management, as the district grapples with a $10 million deficit for fiscal year 2026.

During the board's August 3 planning meeting, accounting firm Weaver Tidwell presented results of an independent audit examining the district's budget processes, travel expenses, and purchasing controls. The firm offered more than 70 recommendations distilled into 10 priority actions to strengthen budgeting and spending controls.

The audit identified control gaps, policy deficits and concentration of authority within the district's budget process, as well as non-compliance and outdated policies relating to travel and expense reports. Among the audit's six core themes were documentation and audit trail deficiencies, inadequate internal controls, and insufficient board oversight and transparency.

Auditors found the FY 2025 general fund reserve ended at roughly 1 percent of spending, below the state's 2 percent requirement and the district's own 6 percent policy. The audit also uncovered significant spending variances, including a more than $20 million salary overage.

Board Chair Tyler Murphy pledged to implement a comprehensive corrective action plan with regular public reports. However, the interim chief financial officer warned the process will take considerable time, noting that many of the highest-priority fixes have already begun.

Earlier that day, the district held a ribbon-cutting ceremony for the Rise STEM Academy for Girls, described by acting superintendent Dr. Bill Bradford as reflecting dedication from staff and volunteers. The celebration marked a bright spot for the financially beleaguered district, which has already cut $20 million from its budget, eliminated 120 positions and sought a $95 million short-term loan to cover expenses.