State Auditor's Office Releases Audit of Winston-Salem Forsyth Schools Showing Financial Mismanagement
Yesterday, State Auditor Dave Boliek released an audit of the Winston-Salem Forsyth School district that revealed serious mismanagement. The report shows that $46 million budget deficit was the result of poor financial decisions.
“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. 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,” said State Auditor Dave Boliek. “By shining a bright light on these specific problems, it is our hope that a sense of urgency will develop in Winston-Salem/Forsyth County Schools to right the ship in a hurry.”
Highlights of the report include:
More than $75 million in bonuses were given out as WS/FCS overspent its annual revenue during FY 2022 and FY 2023.
WS/FCS used COVID-era temporary federal funding to support staff salaries, but once the federal funds dried up, WS/FCS did not remove positions and instead absorbed the costs.
WS/FCS failed to reduce its staffing levels proportionally despite a decrease in its student population.
WS/FCS manually overrode the budget 311 times to approve purchase orders.
WS/FCS did not reconcile budgeted and actual revenue and expenditures in a timely manner.
WS/FCS misused suspense accounts meant to hold transactions until proper classification. As of June 5, 2025, the total balance under all the suspense accounts was more than $332 million. In standard accounting practice, all items in a suspense account should be promptly investigated and resolved to ensure the account regularly maintains a zero balance.
WS/FCS was not fully reviewing all active contracts when creating the system’s annual budget.
Here are some recommendations from the State Auditor’s office.
WS/FCS should consider adjusting its staffing to more proportionately reflect the number of students it serves and the appropriations it receives, or whether other appropriated funding exists to support its positions.
WS/FCS should refrain from using temporary funding to support non-temporary positions in the future, or if it uses temporary funding to support non-temporary positions for a time, it should plan for how it will continue funding those positions once temporary funding is no longer available.
Unless an emergency arises, the District’s CFO and Financial Services Department should consistently use the budget transfer process adopted by the District in the Budget Resolution on September 10, 2024, in place of the budget override process.
WS/FCS should consider refraining from issuing discretionary bonus payments until its financial condition improves. Before issuing future bonus payments, WS/FCS should carefully consider how doing so will impact fund balances.
The district should more fully consider the financial liabilities agreed to in its contracts when creating its budget.
