LOUISVILLE, Ky. (WDRB) — An assessment of Jefferson County Public Schools' finances and budget practices found the district "lacks a clearly defined, consistently applied framework for financial oversight."
In October 2025, the Jefferson County Board of Education approved an audit plan aimed at addressing what's projected to be a $188 million budget shortfall in JCPS' 2026-27 budget, reviewing fiscal years 2022-25.
Plante Moran completed the independent assessment of the district, giving an outside deep-dive into JCPS' budget practices. It focused on new positions, pay raises above cost-of-living increases, district bidding practices and programs costing more than $1 million a year. It also examined how district leaders and the JCBE have managed money, recommending ways to strengthen financial stability.
A draft version of the firm's assessment was discussed Wednesday during the district's Audit and Risk Management Committee meeting ahead of its formal presentation during the district's the next board meeting.
The review found former Superintendent Marty Pollio made most budget decisions without a formal review process or approval from other district leaders.
The assessment found the district's chief financial officer lacked practical authority to approve or deny budget changes once the superintendent endorsed them.
CFO Eddie Munns, who has worked in the district's financial department since 2001, agrees with the assessment's findings.
"When looking at these assessment themes, we agree 100% with all of the themes written here," Munns said. "It's as if I wrote it myself."
According to the report, board materials "frequently lacked essential context," preventing fully-informed spending decisions.
"It's really hard to vote on a board and understand the impact of what total purchases mean if we don't know the total number," said board member Taylor Everett.
Financial leaders acknowledged omissions during a board meeting in September.
The report says before 2025, the district lacked a defined job classification system, which is what is used to determine raises. It says Pollio submitted items directly to the board, and raises and position additions were not reviewed by budget or finance teams.
Between 2023 and 2024, total compensation increased by $78.12 million.
Add-on school costs, mostly used for new positions like mental health practitioners and school safety administrators, increased by more than $137 million from 2022 to 2025.
Additionally, a return-on-investment analysis has "not been consistently integrated" into budgeting decisions when it comes to programs, projects and initiatives. By making decisions "focused on perceived student benefit" with "limited" data-driven analysis, the assessment found the district "risks inefficient resource allocation, limited accountability and misalignment between spending decisions and long-term strategic objectives."
Dr. Yearwood said in the past the district has not "quite paid attention to" student outcomes like if students are reading on grade level.
The firm found JCPS relies on "non-recurring funds," historically using temporary or nonrecurring funding sources — such as federal relief funds, which helped during the COVID-19 pandemic, and contingency funding. According to the assessment, the district has relied on such funding to "expand programs, staffing, and initiatives without establishing long-term sustainability plans."
Because of this, the assessment found the district approved initiatives without "deliberate consideration" of ongoing fiscal capacity. The firm said to restore long-term financial sustainability, it is essential the district reduces reliance on non-recurring funds. An example provided in the assessment was the purchase of Chromebooks funded during ESSER, in which the district failed to establish a long-term plan for repair, maintenance and replacement of the computers.
Among the findings, the assessment found JCPS "lacks a clearly defined, consistently applied framework for financial oversight across schools and central office departments." It adds that while principals get budget training and staff get purchase training, there is no comparable budget training for central office staff — who are responsible for managing departmental funds.
As a result, the assessment found that leaves the district "vulnerable to inconsistent practices, overspending, resource misallocation, inadequate oversight, and delays in identifying issues requiring corrective action."
The report also says multi-year forecasting was not integrated into the budget process, something peer districts do. It also pointed out that JCPS often purchased from vendors without a competitive bidding process.
District leaders said they will now review the findings and make changes.
JCPS board member Taylor Everett said “as a board we need to make sure those things are implemented in board policy and are going to be followed.”
Examples included in the assessment
The assessment also provided a number of examples to support the findings. Of those, the assessment found the district did not implement a plan developed to phase out Accelerated Improvement Schools funding once schools exited Kentucky's Comprehensive Support Improvement roster. Because of this, six schools in 2024 and nine schools in 2025 continued receiving partial funding totaling $1.5 million and $2.6 million, respectively, despite no longer appearing on the roster, without "a defined cut-off period or rationale, resulting in ongoing allocations that were not guided by long-term budget planning."
A chart comparing the difference between revenues and expenses in the General Fund Working Budget and the actual results at the end of 2022 through 2025 shows the Working Budget "reflects anticipated deficits." However, "actual results consistently outperform these expectations." It found that in 2022 and 2023, the district ended the year with surpluses. In 2024 and 2025, however, the district discovered deficits that were "smaller than budgeted."
The assessment found the board was not consistently provided with monthly budget-to-actual reports. It noted that after a regular business meeting in April 2023, monthly financial reports comparing the budget to actuals in all major budget categories were no longer included within the consent agenda for those meetings.
Additional examples include:
- Materials frequently lacked essential context when the board was asked to approve financial items.
- After a board work session in September 2023, changes to the central office organizational chart no longer included a comprehensive summary of the changes.
- The district does not have a defined job classification system, leading to position reclassifications without consistent criteria.
- Before 2025, district leaders submitted new position or reclassification requests to the chief of Human Resources and the superintendent and were not reviewed by budget, finance, or any cross-functional body.
- Because of this, organizational changes moved forward with limited financial or operational analysis, routinely placing organizational chart updates and job description revisions on the board's consent agenda for approval at most meetings.
- The district does not maintain current and consistently applied guidelines for determining appropriate position classifications, meaning positions have historically been upgraded, downgraded or reclassified without documented criteria or consistent justification, risking inflated personnel costs due to inconsistent classification.
- The board is unable to make fully-informed decisions on spending approvals.
- The district has not formally integrated multi-year forecasting into the budget development process.
- Recurring expenses initially paid with ESSER funds were transitioned to the General Fund without a defined district-wide evaluation process to confirm program, project or initiative efficacy or sustainability.
- The district did not structurally reset expectations as ESSER support tapered.
- The district uses reserves to cover expenses, experiencing lower-than-expected revenues or vacancy savings, or encountering unplanned costs.
- While Kentucky law requires financial training for board members, it is not a district-specific process. As a result, some board members have participated in budget talks "without a full understanding of the complexities of school finance and have expressed interest in more targeted onboarding.
- The district does not have a documented, district-wide delineation of purchasing responsibilities between schools and central departments.
- This lack of clarity contributes to overlapping efforts and duplicate purchasing activities, including situations where school sites independently procure goods or services that could be sourced more efficiently through centralized processes.
- This leads to the potential for duplicative purchases where schools and central departments purchase similar items independently, and increased costs.
- This lack of clarity contributes to overlapping efforts and duplicate purchasing activities, including situations where school sites independently procure goods or services that could be sourced more efficiently through centralized processes.
- JCPS did not conduct town halls, surveys or maintain advisory groups dedicated to gathering input on budget priorities.
- Looking ahead, there are opportunities to strengthen and formalize a more systematic approach to incorporating broader community feedback into the budgeting process.
When comparing other districts, the assessment found JCPS does not adopt policies requiring a balanced budget, setting minimum fund balance targets, and specifying rules for using and replenishing contingencies and/or reserves. Additionally, it found JCPS has no formal process to link strategic plans to the budget as other districts do. It also found other districts do more extensive financial training with board members and annual budget training for district budget managers. Lastly, it found that JCPS does not use utility taxes as other districts do.
JCPS board works to address budget deficit
In January, the Jefferson County Board of Education accepted a draft budget with $142 million in proposed cuts as the district tries to balance its budget.
Earlier this month, as part of those cuts, the district approved a reduction and restructuring plan for its central office.
As the district makes painful cuts, JCPS faces pressure to close the budget gap exacerbated, in part, by a decline in state funding.
In 2018, JCPS received more than $256 million from the state through the Support Education Excellence in Kentucky (SEEK) funding program, which is the state's main education funding formula.
By 2025, that funding dropped to about $216 million — a hit made worse by soaring inflation.
While overall revenue in JCPS has grown, where the money comes from has changed as the district relies more on local taxpayers.
In 2019, about 31% of the district's revenue came from property taxes. But by 2025, that rate climbed to more than 37%.
The Kentucky Center for Economic Policy found SEEK payments to JCPS have decreased by 45% since 2008. When adjusted for inflation, it shows a steady decline.
Related Stories:
JCPS faces pressure to close budget gap as state 'SEEK' funding decreases
JCPS board votes in favor of central office reductions, restructuring plan
JCPS superintendent says 'nothing was clear' about budget deficit when he took office
State lawmakers file school finance transparency bill amid JCPS budget crisis
Board accepts draft budget, closes 2 JCPS elementary schools as part of $142M in cuts
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