The N.C. Local Government Commission voted unanimously Tuesday to help the N.C. State Board of Education with an audit of Winston-Salem/Forsyth County Schools.
The school district is grappling with a $46M deficit after years of financial mismanagement.
The district's board voted last month to cut 343 positions. That decision is projected to save about $18 million, preventing the deficit from growing.
Last week, the State Board of Education voted to conduct an outside audit of the district after State Auditor Dave Boliek released a 39-page report from his office finding a slew of decisions that led to the district's perilous financial state.
Among the problems the auditor's report identified in North Carolina's fourth-largest school system were:
- A failure to reduce the number of full-time employees in recent years as the number of students declined.
- A failure to remove positions funded by the federal government's Elementary and Secondary School Emergency Relief funds even after the funds expired.
- The district's previous chief financial officer manually overrode the budgets to make 308 purchases between July 1, 2024, and May 9, 2025, with the district only adjusting budgets upwards to reflect 33 of those purchases.
Boliek also found that the auditor hired by the district missed some of the financial issues his office found, giving the Department of Public Instruction and Local Government Commission the authority to launch a separate probe of the district's financial procedures. It's a rare oversight measure, but, Boliek said, a necessary one.
"There's not a lot of statutory teeth with respect to those types of management failures and oversight from the state level, but this was one statutory provision that does dial both the State Board of Education and the LGC into some level of oversight," Boliek said.
Boliek said that because the district's existing audit missed some issues, it couldn't conduct the internal control audit. And, he said, it would not be appropriate for his own office to conduct the audit because of the nature of its report.
"Hopefully it will help to right the ship of Winston-Salem and Forsyth County to get their budgetary problems under control," Boliek said.
State Treasurer Brad Briner thanked Boliek and his team for its work and blasted the district for its mismanagement of funds. Briner said that reading the state auditor team's report makes him "so angry."
"The abject failure for the students of Forsyth County makes me mad, makes me sad. Thank you for identifying it, and the State Board made the right call, mismanagement. If you can't find mismanagement here, you'll never find mismanagement," Briner said.
Ultimately, Briner said, the school district had run so far over budget for so long that there was no way to avoid significant cuts. He expressed particular concern about the number of assistant principals across the district.
"If you've ever run any kind of business at any level, the violations that happened in this school district are so basic and so obvious that we have to take it incredibly seriously," Briner said.
The Local Government Commission directed its secretary, Denise Canada, to work with the Department of Public Instruction to identify auditing firms that could review the district's internal controls and to develop a scope-of-work and procedures for an upcoming audit.
"I have heard from you that this is a priority. Obviously you have a legal requirement to act, but it's also concerning and something that we would want to partner with the State Board of Education to help them," Canada said.
The Local Government Commission must approve the contract for special purpose audits. The school district will pay for the internal controls audit.
"It will not be cheap and we recognize that this school district is struggling with money to begin with, but you've got to get it on the right path for the long term," Briner said.
Briner said the internal controls need to be in place by the end of the fiscal year, on June 30, 2026.
Boliek also vowed that his office could return to Forsyth County for more investigations.
"Just because we've finished one report doesn't mean we can't come back," Boliek said.
