A 500-page examination found the district's deficit ballooned from $47 million to $295 million in three years- and that no one stopped it.

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Jefferson County Public Schools didn't just run a budget deficit for four straight years. According to a 500-plus-page special examination released this week by Republican state Auditor Allison Ball, the district may have broken state law doing it.

The audit, ordered by the Kentucky General Assembly in 2024 legislation and covering fiscal years 2022 through 2025, lands on a finding that goes well beyond the usual "needs improvement" language of a government audit: JCPS Superintendent Marty Pollio and the Jefferson County Board of Education "may have been out of compliance" with KRS 160.550, the state statute that prohibits a superintendent from recommending- or board members from knowingly voting fo- a budget where spending exceeds revenue.

"No superintendent shall recommend and no board member shall knowingly vote for an expenditure in excess of the income and revenue of any year, as shown by the budget adopted by the board," the statute reads, as cited in the audit.

Auditors say that's effectively what happened, year after year.

The deficit, by the numbers

JCPS carried a budget deficit of nearly $47 million in fiscal year 2022. By FY25, that gap between what the district spent and what it brought in had ballooned to $295 million- the largest of the examination period. The district's FY26 working budget projected the deficit would narrow to $188 million, the figure JCPS has cited publicly over the past year.

How did a district keep approving budgets like that without the lights going out? According to the audit, the district covered the gap by spending down its fund balance- money built up from property tax increases and a one-time infusion of $500 million in federal COVID relief (ESSER) funds. That cushion is now nearly gone. Auditors project the district's contingency fund, which state law requires to stay at a minimum 2% of the total budget, could drop into negative territory by FY28 unless JCPS makes major cuts to its FY27 and FY28 budgets.

"JCPS has been in a budget deficit since FY22," the audit states. "District planned expenditures have exceeded New Year Revenues in every formal iteration of the budget developed by JCPS administration and approved by the Board between FY22-26."

"You are now the future board"

The audit paints a picture of a district that had the cash on hand to avoid hard choices- until it didn't. Auditors note that under Pollio, "a 'budget plan' did not exist for use of unassigned funds beyond the state-required minimum contingency," which led to a practice of dipping into reserves to cover both one-time and recurring expenses well beyond what the district was bringing in.

The audit includes a striking moment from a September 16, 2025 board meeting, when a Finance staffer leveled with board members about how the district got here:

"The law requires us to have a balanced budget… the challenge is we've engaged in a practice because we had the cash flow to do it to have larger and larger deficits every year," the staffer said, according to the audit. "So that's why we are in the situation where we are kicking the can down the road and a future Board is going to have to make hard decisions. You are now the future Board."

Where the breakdown happened

Auditors describe a pattern in which financial commitments were made by Marty Pollio "without the involvement of the CFO or against the advice of the CFO"- a dynamic multiple finance staff said played out across his tenure and across multiple chief financial officers. The audit also says Pollio had final editorial control over budget reports before they went to the board, and cites examples of revisions staff say minimized the appearance of the deficit- including, in one case, categorizing recurring expenses like positions, curriculum, and contract services as "one-time" costs.