In Aug. 21-27 issue
By Greg Wells
Times Journal Managing Editor

JAMESTOWN - An accounting situation involving an auditor's error has apparently led to a state oversight of the local school system.

The reports of distress in Wayne County over that school district’s financial problems, and the hand that Kentucky Department of Education has taken in response, prompted some to draw comparisons to the Russell County system.

The Wayne County district has been designated as being in “emergency” need of intervention and oversight by the state, according to the report and the statement was that Russell County was in a similar situation.

“There was a half-a-million dollars that their auditor put in the wrong fund,” Russell County Superintendent Scott Pierce said.

He said he has since filed paperwork addressing the issue and the state has confirmed that they are awaiting an independent audit in the case of Russell County’s finances.

“Its not a big issue here like it is in Wayne County,” Pierce said.

Lisa Gross with the Kentucky Department of Education confirmed that the department was looking into both districts, and that the commissioner’s staff would be watching the financial status of both districts.

She said she understood that Russell County had been in a similar situation last year, and that year it had been established that the district was not in the shape it had been reported by their auditors after reviewing the district’s independent audit.

“That just occurs,” Gross said. “It may be money and it may be just numbers.”

At Monday’s school board meeting the treasurer reported the district started the month with over $5 million in the bank and ended with over $7 million. The general fund there was over $1.1 million in the bank and the only fund with problems was that of the food service department, which had outstanding reimbursement due that fund.

Gross said the state’s action was because “We’re interested in quick assistance — we’re not taking over.”

She said that neither students not teachers would likely be able to tell that anything was any different at school than in any other year.

Though the Wayne County district actually had a negative fund balance, she agreed that Russell County’s district was in the black. However, the state requires a two-percent contingency “cushion” in case of emergency. It is that figure she said their numbers show Russell County dipping below.

She said they will be re-examining the situation once the district’s yearly audit is in. There is one other district on the edge of being in “emergency” status and as many as five fall into that category during an average year Gross said.

That was before the present financial difficulties for Kentucky.

“This is a bad budget year and next year may be worse,” Gross added.