NC school district owes millions, is laying off hundreds. It faces state audit.
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- State Board approves audit after Winston-Salem/Forsyth mismanaged millions
- District eliminates 350 jobs, facing student walkouts and furlough protests
- Report cites $75M in bonuses, funding errors, and hundreds of overrides
The State Board of Education will audit one of North Carolina’s largest school systems as it undergoes mass layoffs and questions about mismanaging tens of millions of taxpayer dollars.
The State Board of Education unanimously voted Thursday to conduct an independent review of the Winston-Salem/Forsyth County school system’s finances. Based on a recent special report by State Auditor Dave Boliek’s office, state board members said there were “incidents of management failures within the Winston-Salem/Forsyth County Schools.”
“Our intent is solely focused on trying to return that district to a healthy financial position in order to carry out and deliver our constitutional responsibilities to a sound education for every student in Winston-Salem/Forsyth County Schools,” said state board chair Eric Davis after the vote.
“That is our objective, and we look forward to working with the Winston-Salem/Forsyth County board in returning them to a state of financial health and working with them to raise the academic achievement of their students.”
The state Department of Public Instruction will work with the Local Government Commission to select an audit firm at the state board’s October meeting.
“This is a basic math problem,” State Treasurer Brad Briner posted Thursday on X, previously called Twitter. “Expenses can’t exceed revenues and money doesn’t grow on trees. Students and parents deserve better and this is the right next step to hold the district accountable.”
Layoffs and student walkouts
In addition to seeking the audit, the state board voted Thursday to extend the grace period before it charges interest on $3.4 million in state funds that the district owes. Briner, a state board member, suggested that interest be charged beginning Oct. 1.
“WS/FCS is grateful to the State Board of Education for providing some flexibility while we pursue our options for reducing the Fiscal Year 2024-2025 deficit,” the district said in a statement Thursday. “We have been working closely with the Office of the State Auditor for months and we will continue to cooperate with any requests from our state partners while we work to restore sound financial practices.
“We will continue to do the work to ensure transparency and accountability, and rebuild the trust of the community by showing good stewardship of public dollars.”
The district has taken steps such as eliminating 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 Central Office employees are taking furlough days.
The layoffs triggered a wave of walkouts by thousands of high school and middle school students, The Winston-Salem Journal has reported.
The district brought in retired Wake County Superintendent Catty Moore to be interim superintendent. Moore, who is also a member of the state board, recused herself from Thursday’s votes involving the district.
District accumulated $46 million in debt
Winston-Salem/Forsyth County Schools is North Carolina’s fourth-largest school district. It has around 50,000 students.
The district has been reporting bad financial news all year as the size of the budget debt rose to $46 million. The district ended the last budget year owing $11 million, before paying it down to $3.4 million.
Events came to a head in August when Boliek issued a blistering special report 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 Year 2022 and Fiscal Year 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.
Boliek had been pressing the state board to issue a finding of management failures in the district and conduct an audit.
“Today, the State Board voted unanimously to make that finding, which will trigger an independent review of internal control procedures at WS/FCS,” Boliek said in a post Thursday on X. “This accountability measure will bring another layer of statewide oversight to a massive budget deficit impacting one of North Carolina’s largest school districts.”
Board members should ‘donate’ their pay
The state board split 5-4 on extending the grace period on the interest payments. State board member Olivia Oxendine, who voted against the extension, said what happened in Winston-Salem/Forsyth should be a case study for school leaders in how not to govern.
“I do not sense that the (Winston-Salem/Forsyth County school) board gave consideration to protecting the resources of the taxpayers of Forsyth County, or the importance of their role in protecting those resources for the education of the students in that system,” Oxendine said.
Oxendine said the Winston-Salem school board members should rethink if they are in the seats they really need to be in. She also suggested those board members take a symbolic step by giving up their pay.
Winston-Salem/Forsyth County school board members receive an annual stipend of $22,965 to $26,765, depending on their position.
“They need to donate their monthly stipend to help pay off this bill at a minimum,” Oxendine said.
This story was originally published September 4, 2025 at 3:46 PM.
