FCPS employee sues district over alleged retaliation for financial misconduct reports

LEXINGTON, Ky. (ABC 36 NEWS NOW) – A former Fayette County Public Schools grants accounting manager has filed a lawsuit against the school board and Superintendent Demetrus Liggins, claiming she was retaliated against after repeatedly reporting suspected financial misconduct within the district.

Mira Beth Muth, who served as District Wide Manager Grants Accounting for the Fayette County Public School District during the 2023-2024, 2024-2025 and 2025-2026 school years, filed the verified complaint July 13 in Fayette Circuit Court. The lawsuit names the Fayette County Public School Board and Liggins in his official capacity as defendants.

What Muth says she reported

According to the lawsuit, Muth consistently reported to her supervisor, Rodney Jackson, that the district was non-compliant in effectively distributing and/or refunding funds in its grants. She also informed him that the district was illegally moving funds between Fund 1 — which covers tax payments and SEEK funding from the state — into Fund 2, which covers all grant-related funds and donations. The lawsuit claims this was done to free up money in Fund 1.

The complaint states Jackson repeatedly told Muth she was going “too deep” into the grants, allegedly instructed her not to answer emails without his explicit permission, and allegedly told her not to ask any questions to the Kentucky Department of Education without prior approval.

In January 2025, the lawsuit states, Jackson told Muth there was “a target on her back,” which the complaint characterizes as a threat due to her good-faith reporting of the district’s mismanagement of grants.

Reassignment and second instance of alleged misconduct

On March 16, the lawsuit states, Jackson told Muth she would no longer be working in Fund 2 as District Wide Manager Grants Accounting. The lawsuit reads that Muth was reassigned to the tax department and began reporting to a different supervisor.

After her reassignment, Muth met with district officials to reportedly seek an explanation. The lawsuit states she received no clear answer. During those meetings, Muth raised concerns that financial information being presented to the board and the public was inaccurate and misleading because the grants had not been properly managed, according to the lawsuit.

The lawsuit states Muth was later told she was removed because the district needed “less hands in the pot.” The complaint states her former position was never filled and remains vacant.

In her new role in the tax department, Muth says she discovered tax payment checks without the necessary tax identification numbers were being placed into U.S. mail totes to be processed “at a later date.” The totes were stored in locked employee offices and, according to the lawsuit, filled nearly entire rooms. At one point, the complaint states, Muth had a tote containing more than $250,000 in unprocessed tax payments in a single day.

Meeting with Liggins

On April 23, according to the lawsuit, Muth met directly with Liggins and shared her concerns about the unprocessed tax checks and the district’s financial reporting practices. The lawsuit states she described the fund-moving practice to Liggins as “like a shell game” and told him the district was constantly moving money to inflate figures in Fund 1.

According to the complaint, Liggins thanked Muth for being “brave enough to come forward” and said she had shared information he had, allegedly, not been aware of prior. He told her he would be in touch.

Five days later, on April 28, a letter was reportedly delivered to Muth stating her contract had not been renewed. On April 29, the lawsuit states, Muth underwent a psychological evaluation and was diagnosed with PTSD, which was directly attributed to her employment with Fayette County Public School District.

Claims and relief sought

The lawsuit alleges the defendants violated Kentucky’s whistleblower protection statute, which prohibits employers from retaliating against employees who in good faith report actual or suspected violations of law, mismanagement, waste, fraud or abuse of authority.

Muth is seeking compensatory and punitive damages in amounts to be determined by a jury, injunctive relief reinstating her to her employment position with a renewed contract for the 2026-2027 school year, and an order preventing the defendants from further discriminating, harassing or taking adverse action against her. She is also seeking litigation costs and attorneys’ fees.