The Fayette County Public Schools audit committee voted Sept. 24 to gather additional documents and information about pending audits, engagement letters and allegations before deciding whether to issue a request for proposals for an external review of the district's budgetary processes.

Board Chair Murphy told the committee the board wants "a thorough and fair process" and welcomed "any and all independent external reviews" the audit committee recommends. A staff member summarized an engagement letter the board had retained for an independent investigation, and committee members discussed coordination with the state auditor and the district's external auditors.

Committee members said their first step will be to compile a clear list of outstanding and planned audits, investigations and engagement letters, and to obtain foundational legal and budgetary details before deciding the scope of any new work. The motion to gather that information and reconvene passed on a unanimous voice vote.

Nut graf: Committee members said the immediate priority is to determine what reviews and investigations are already under way so the audit committee can avoid duplicating work, limit cost, and decide whether a targeted review of the budget process or a broader forensic-style investigation is warranted.

In discussion, Nick Clark, a district staff member, said he had spoken with the state auditor and that the auditor's office had requested documents and was planning analytic work focused broadly on revenues, expenditures and internal controls. Clark said the state auditor's initial document request was due by the end of the week and that the auditor's office had tentatively indicated a timeline that could reach into the spring, depending on findings.

A staff member read the engagement-letter language for an independent investigation the board retained, saying the firm was hired "to conduct an independent investigation on behalf of the Fayette County Board of Education in connection with allegations" described in an Aug. 27 letter; the scope was described as an impartial fact-finding inquiry into whether board or district policies were followed and to produce a written report at conclusion. The engagement-letter text read during the meeting named the external investigators as "Van, Ann Wert attorneys" in the reading presented to the committee.

Committee members also discussed the district's external auditor, LBMC, and noted that LBMC's audit contract is approved by the Kentucky Department of Education and that LBMC would be reviewing financial statements and related controls as part of its contract work.

Members pressed for legal and technical clarifications. A committee member asked whether Kentucky law (KRS) specifies any requirements for the district contingency fund; a staff member said a KRS provision requires that the contingency not dip below 2 percent and that the calculation involves multiple district funds, and the staff member agreed to provide the precise citation and details. During the meeting, participants referenced the district's fund numbering (fund 1 as the general fund, special revenue funds for grants and other funds such as food service) and that some funds are subject to stricter restrictions on use.

Committee members identified separate HR and retaliation matters that are being handled by the board's retained attorney and said the audit committee would avoid intruding into active litigation or personnel investigations. Several members said the budget-process questions—communication, controls and escalation of concerns—were an appropriate initial focus for an audit committee review, and that any expansion into forensic testing should be tightly defined.

The committee agreed as next steps to have staff compile: (1) a list of pending and planned audits, reviews and investigations along with their scopes and engagement letters where available; (2) the relevant KRS citation(s) and details on the contingency fund calculation; and (3) clarification of what LBMC and the state auditor plan to review so the committee can avoid duplication. The committee planned to reconvene after reviewing that material to determine whether to develop an RFP and the appropriate scope of any external review.

Ending: After the discussion the committee moved, seconded and approved a motion to collect the requested information and return for a follow-up meeting. Committee members closed the session shortly thereafter.