(The Center Square) – Buried last fall in a $46 million budget hole and saying it welcomed state auditor help, North Carolina’s fourth largest public school district remains far from compliance and accountability.
In a report to the governor, General Assembly leaders and the superintendent and Board of Education for Winston-Salem/Forsyth County Schools, first-term Republican state Auditor Dave Boliek said his reports shows the district “has not made significant progress in fixing its financial issues and restoring public trust in the school system.”
“Most concerning were the substantial costs kept off the books,” Boliek wrote in his letter. “Our report found approximately $15 million of expenditures incurred during the fiscal year ended June 30, 2025, were not recorded until September 2025. This was a serious point of discussion during our exit conference with the Winston-Salem/Forsyth County Board of Education and system administration.”
The district told The Center Square in September total unpaid debts were about $38 million. According to the state auditor’s report issued a month earlier, bonuses of $75 million over two fiscal years – 2022, 2023 – awarded by the school system contributed to the $46 million budget deficit.
Boliek’s office said findings of the follow-up report include:
• On Sept. 20, 2024, WS/FCS’s Finance Office executed a budget transfer of $16.99 million from the Non-Instructional Support Program to the Restart Schools Program. The transfer exceeded the Non-Instructional Support Program’s available balance of $13.92 million, creating an immediate overdraft. By April 30, 2025, the overdraft reached $11.34 million.
• WS/FCS’s Finance Office failed to complete monthly reconciliations of budgeted versus actual revenue and expenditures.
• Throughout Fiscal Year 2025, WS/FCS kept substantial costs off-the-books. Such costs were not recorded until September 2025, at which point the Finance Office backdated the costs to June 30, 2025.
• WS/FCS’s Board of Education authorized a zero-interest internal loan from the Child Nutrition Fund for up to $6 million to cover WS/FCS’s cash shortfalls. The loan agreement lacked clear terms for interest, repayment, and penalties, raising concerns about the integrity of the funds and compliance with program guidelines.
“Winston-Salem/Forsyth County Schools remains far from having healthy budgeting practices in place,” Boliek said. “Winston-Salem/Forsyth County Schools is one of the largest school districts in North Carolina. The additional findings of financial misconduct the team uncovered in our followup show a failure to keep their books straight. Winston-Salem/Forsyth County Schools owes parents, teachers, and students accountability.”
The district’s response says it has a 90-day corrective action plan. It responded to each finding with a corrective plan, estimated time to complete and people responsible. Angela Clark, interim chief financial officer, is involved in each.
