NC school district has $46 million deficit. An audit will see if it’s on track.
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- State board authorized an outside audit to assess WSFCS finances and remedies.
- District cut 350 positions, imposed furloughs and faces school closures.
- Audit will examine controls, purchasing, reporting, staffing and implementation.
State education leaders have a plan for taking a deep dive into whether one of North Carolina’s largest school systems can dig out of a multimillion-dollar financial hole.
The State Board of Education approved a “scope of work” Thursday for what an outside audit firm will look into as it reviews the finances of the Winston-Salem/Forsyth County school system. The district is undergoing mass layoffs, employee furloughs, school closings and other cost-cutting measures to try to erase a $46 million budget deficit.
“The purpose of the review is not to re-investigate the causes of the deficit, which have been well documented, but to ensure that corrective actions are comprehensive, effective and sustainable,” according to the document approved by the state board.
The state board had voted in September to bring in an outside firm to do the audit. State board chair Eric Davis said Thursday he has asked state Department of Public Instruction staff to expedite bringing in proposals from different firms.
Layoffs, furloughs and school closings
Winston-Salem/Forsyth County Schools is North Carolina’s fourth-largest school district. It has around 50,000 students.
The district eliminated 350 positions, with up to 275 employees losing their jobs, The Winston-Salem Journal has reported. In addition, about 50 assistant principals are being demoted and reassigned to 10-month teaching jobs and hundreds of employees, including teachers, are taking furlough days.
The layoffs triggered a wave of walkouts by thousands of high school and middle school students, The Winston-Salem Journal reported.
More recently, the school board voted for more cost-cutting measures such as having employees pay for their dental insurance, according to The Winston-Salem Journal.
The district has also been looking at closing schools to save money, according to The Winston-Salem Journal.
School district spending questioned
Winston-Salem/Forsyth’s budget woes resulted in the State Auditor’s Office issuing a blistering special report in August accusing the district of engaging in years of poor financial decision-making. Concerns raised included:
- More than $75 million in bonuses were given out as the district overspent its annual revenue during fiscal years 2022 and 2023.
- The district used COVID-era temporary federal funding to support staff salaries. But the district didn’t remove the positions and instead absorbed the costs when the federal funds ran out.
- The district failed to reduce its staffing levels proportionally, despite a decrease in its student population.
- The district manually overrode the budget 311 times to approve purchase orders.
“Winston-Salem/Forsyth County Schools dug itself into a deep financial hole, and it’s going to take real discipline to climb out of it,” State Auditor Dave Boliek said in an August press release. “Our schools need to be focused on teaching students. That becomes a lot more difficult when you’re staring down a $46 million budget deficit.”
District staffing decisions to be reviewed
The new audit commissioned by the state board will focus on six areas:
- Internal controls and fiscal policies/procedures
- Purchasing and contracting
- Financial reporting and transparency
- Audit findings and corrective action
- Identification of needed internal controls
- Implementation roadmap
State Treasurer Brad Briner, who is also a state ed board member, said he particularly wants the audit to focus on the district’s staffing decisions.
“One of the failings that was in the Auditor’s report that we observed was inattention to allotments and staffing ratios that are implied by those allotments, and so one of the internal controls that I hope and expect will come out of this is some accountability for the local district of looking at allotments,” Briner said.
The vote was unanimous. State board member Catty Moore, who is Winston-Salem/Forsyth County’s interim superintendent, recused herself from the vote.
