The state auditor says Kentucky’s Department of Education allowed millions in funding to lapse, wasted money on diversity, equity and inclusion efforts and violated the U.S. Constitution by prohibiting state preschool money from going to private religious programs, according to a special examination released this week.
“Kentucky’s children deserve to receive the education they need to be competitive in the real world,” said GOP state Auditor Allison Ball. “This examination provides a clear path forward for student success, parent accessibility, and teacher support in all of Kentucky’s schools.”
The Kentucky General Assembly passed House Bill 825 last year to call for the audit and required the department to pay for the cost, about $1.2 million, according to the commissioner.
The 556 page audit identified some positives within the department, including high morale within the agency and satisfaction from surveyed superintendents. In a statement, Education Commissioner Robbie Fletcher said they “respect the role of the Auditor’s office,” even as they disagree with some of its findings.
“While there are areas of the report where KDE holds a different perspective… we believe strongly in listening carefully and using feedback as an opportunity to grow,” Fletcher said in a statement. “KDE remains committed to transparency, collaboration, and most importantly, ensuring that every decision we make improves the educational experience for ALL Kentucky students in our public schools.”
One of the more contested claims in the audit is that the department erroneously allowed $250 million to lapse over the last four years into the state’s rainy day fund. Ball’s office cited a provision in the budget that she said would have allowed the department to redistribute those funds — a reading which the education department refutes.
The department had a surplus of funding that they allowed to lapse because budgets are based on estimates and the actual numbers shift throughout the year. Last year, superintendents and the department asked the General Assembly to reallocate funds to cover a $40 million shortfall. In a statement, the Kentucky Association of School Superintendents last year asked the legislature to close the shortfall using the lapsed SEEK funds, which is the money distributed through a funding formula on a per-pupil basis to school districts.
“To close this year’s gap, 25% of that money is needed - a small drop in the bucket,” the association said. “Not closing the gap will lead to budget shortfalls locally, which could impact jobs, whether or not districts can give raises, and uncertainty in the budgeting process moving forward.”
Ball now says that a provision in the budget would have allowed the department to cover at least some of that shortfall themselves, particularly via portions of the SEEK formula that lawmakers didn’t fully fund the first time around, namely transportation.
But the department took a different view, defending their legal reading of the text and saying shifting funds would require an act of the General Assembly. They also noted that the budget language Ball cited is new to the 2024 budget — almost $100 million of the $250 million shortfall she noted was allocated in a budget that didn’t give the department that kind of authority.
The auditor responded, recommending that “in the future, KDE consult the General
Assembly on matters like this instead of publicly criticizing it. Had KDE done so here, it would
have been able to properly allocate excess SEEK funds the General Assembly gave it to cover any alleged funding shortfalls.”
In an email to Kentucky Public Radio, Executive Director Jim Flynn of the Kentucky Association of School Superintendents said that, moving forward, the association prefers the position of the state auditor, but were also previously told filling the shortfall would require legislative action.
The audit contained a slew of other concerns and findings, many of which the education department contested or said they had already internally addressed.
Current regulations require that state funds to pay for preschool for at-risk 4 year olds do not allow agencies to contract with private programs that are inherently “religious in nature” or directly incorporated by a religious institution. The auditor said they believed that violates the U.S. Constitution and contradicts Supreme Court precedent. The core of the issue rests in whether these contracts operate as a school choice voucher program or as religious charters. The highest court recently split on whether states could grant charters to religious schools, leaving the decision open to states.
The report found that the department has so far been unsuccessful in closing achievement gaps, especially for Black and Hispanic students. While the report found the state should “increase its focus” on closing those gaps, a release from the auditor’s office said the department’s diversity and equity efforts are a “waste of money.” The audit also noted that the department had eliminated several equity initiatives, including the equity professional learning and the equity dashboard.
“Based on the team’s review, there has been a shift in KDE priorities and a minimized focus on DEIB,” the audit found.
The audit also found that the education department is not doing enough to stop sexual harassment and abuse among student-athletes, aren’t meaningfully supporting the the Kentucky School for the Blind and the Kentucky School for the Deaf and called for improved benchmarks for determining success.
State government and politics reporting is supported in part by the Corporation for Public Broadcasting.
