State officials are scrutinizing Winston-Salem/Forsyth County Schools' finances. A recent audit found severe weaknesses and no real improvement, which led the district to hire new leaders and revise policies.

Auditor Details 'Severe Weaknesses' in District Finances

The North Carolina Office of the State Auditor recently released a second critical report on Winston-Salem/Forsyth County Schools' (WS/FCS) financial processes, highlighting what it termed "severe weaknesses" during fiscal year 2025. State Auditor Dave Boliek's follow-up review showed the district hadn't actually improved its finances since last fall, contradicting what district leaders were saying.

The audit found a September 2024 budget transfer for nearly $17 million that overdrew its source account by over $11 million—a major red flag. Auditors discovered the district skipped monthly budget checks and hid nearly $15 million in spending, then backdated the records. The report also flagged a $6 million interest-free loan from the Child Nutrition Fund with no clear payback plan or consequences.

Superintendent Don Phipps addressed the audit in a statement, asserting that WS/FCS is in "a new era of fiscal responsibility." Phipps stated the district now has a balanced budget and practices in place to maintain it, signaling a "path to recovery and long-term stability." The board will dig deeper into the audit report to see what's improved and what still needs fixing in the district's money management.

The budget crisis went public more than a year ago. Earlier this month, Phipps indicated the district's debt figure stands at approximately $4.7 million.

New Financial Leadership and Oversight Committee Appointed

To tackle the ongoing money problems and state pressure, WS/FCS hired new finance leaders. Stacy Long, a veteran with 27 years of experience at Wells Fargo, was appointed as the new Executive Director of Finance. At Wells Fargo, Long worked in wealth management, compliance, and risk management.

Superintendent Phipps expressed confidence in Long's ability to lead, stating she has a "proven track record of responsible financial management that leads to lower costs and lower frustration." He emphasized that "excellent monetary stewardship is essential to rebuilding trust with our district's stakeholders."

The district also appointed Jennifer Del Rosario as Director of Payroll. Del Rosario has 17 years of payroll experience at eight different organizations across four states, most recently as an interim payroll consultant director. She holds an MBA from Shorter University.

The district also created a seven-member community audit advisory committee to watch over finances more closely. Over 50 people applied for spots on the committee. Four members got picked: a former Winston-Salem city manager, UNC's chief auditor, a former Morgan Stanley VP, and a Deloitte CPA who worked on Wake County Schools' audit committee. The Forsyth County Board of Commissioners will pick the last three members in the coming weeks. The full committee should be announced in April and will meet four times a year.

Residential Boundaries and AI Policies Under Review

Beyond money troubles, the WS/FCS Board is also working on major policy changes. One big discussion is about creating a policy to review school boundaries every five years. These boundaries decide which school kids go to based on their address.

This is part of a bigger plan to redraw Forsyth County's school boundaries for the first time in over 30 years. Last year's proposed maps caused a lot of pushback from parents, so district leaders are still working on a plan before bringing it to the board.

The board will also look at new policies on AI use in schools and how the district shares student information. The policies are meant to keep up with how technology is changing schools and protect student privacy.

Recent District Operations

In a separate matter, WS/FCS shut down all buildings and canceled activities on Monday, March 16, because of severe weather threats. Strong winds made it too dangerous for buses to run.

Students and teachers are back this week after spring break, and the board is gearing up for more talks about money and policy.