(The Center Square) – The North Carolina State Board of Education has voted to review the internal financial controls of the Winston Salem-Forsyth County School system after a recent state auditor’s report uncovered mismanagement.
A school board resolution approved Thursday calls for the hiring of a separate independent auditor to review the school systems finances and safeguards.
“The State Board of Education, based on the state auditor’s special report, finds that there are incidents of management failures in the Winston Sales Forsyth County Schools and that make it appropriate to review the district’s internal controls,” the school board resolution states. “The staff of the Department of Public Instruction shall coordinate with the Local Government Commission to identify an audit firm to carry out this review and bring an engagement letter back to the state board for approval at its October meeting.”
According to the state auditor’s report issued earlier this month, bonuses of $75 million over two fiscal years awarded by the school system contributed to an estimated $46 million budget deficit.
The school district is the fourth largest in North Carolina and among the nation’s 100 most populous.
“The steps we just took concerning the Winston-Salem Forsyth County schools were difficult decisions,” board chairman Eric Davis said after the vote. “Our intent is solely focused on trying to return the district to a healthy financial position in order to carry out and deliver our constitutional responsibilities to a sound education to for every student.”
One result of the system’s financial problems is that it owes the state $3.4 million for spending more state funds than were allotted.
The state board approved a plan for repaying the debt on Thursday. The plan originally included a grace period until Nov. 20 before the school system would have to start paying interest on the debt at a rate of 1%.
However, first-term Republican state Treasurer Brad Briner offered an amendment to start interest payments earlier on Oct. 1 at 0.4%, “in the spirit of ‘there’s no such thing as free money.’” The interest rate would increase to 1% on Nov. 21. The board approved Briner’s amendment.
Board member Olivia Holmes Oxendine urged her fellow members to read the state auditor’s report on the district’s financial problems. She singled out the local school board for criticism.
“I do not sense that the board gave consideration to protecting the resources of the taxpayers of Forsyth County or their importance of their role in protecting those resources for the education of the students,” she said.
The auditor’s report needs to be a case study for every principal-preparation program in the state, Oxendine said.
“It needs to serve as an example of how not to govern the resources provided by this great state,” Oxendine said. “It could be a textbook, in and of itself, on school finance.”
She suggested that school board members donate whatever stipend they may receive for serving on the board to help repay the debt to the state.
