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In a publicly-released letter sent to the N.C. Department of Public Instruction, Winston-Salem/Forsyth County Schools provided a response to state concerns about the recently-publicized budget shortfall.

WS/FCS used federal pandemic funds to provide additional support to meet the students’ growing academic and mental health needs. The district did not adequately forecast and plan for the reductions to personnel or programming needed to be made due to the loss of those federal funds and reduction in state dollars due to lower student enrollment, leaving the district in a “very unfortunate financial situation,” according to the letter sent the state Board of Education and N.C. Department of Public Instruction.

In the letter, the school district outlines steps it has already taken to address the separation in funding and budgeted spending as well as steps it plans or hopes to take.

Measures that have already been identified as potential answers to the crisis include:

• Cost-saving measures that have already been taken, including a hiring freeze, elimination of many take-home vehicles and travel budgets, elimination of building-specific substitute positions, reducing summer school options to only the state-mandated Read to Achieve programs and moving 39 state-funded positions to federal grant funding where possible. The letter states that these steps have already saved $5 million.
• District department heads are working to identify open or outstanding purchase orders and canceling any unnecessary contracts in the current fiscal year.
• Reviewing records to fully verify the shortfall for the 2024-2025 school year as well as identifying any other measures to avoid “further shortfalls in the 2024-2025 budget.”

The letter also provided information on other efforts the district is undertaking to ensure future compliance with state regulations, including:

• Hiring an interim superintendent. While the letter does not identify a candidate, it does state that the WS/FCS board is looking for a candidate with a proven track record, experience as a superintendent in a district similar in size to WS/FCS and experience with budgetary challenges.
• Submitting a more timely audit to the state for fiscal year 2025 and remedying any issues that led to delayed audit submissions. The audit for the prior year was submitted four months late.
• Reviewing and revising the district’s system of internal controls and communication protocols to “ensure the (school) board has accurate and timely financial information in order to make critical decisions on behalf of the district.” Changes will include monthly financial reports to the board and aligning all employee positions to the “appropriate budget code.”
• The district has already identified $23.4 million in savings for the 2025-2026 budget year and is “mapping out an additional $13 million in savings.” These savings measures include eliminating 81 central office positions and 148 school allotment positions, non-renewing the contract with ESS for substitutes, eliminating traffic control positions, eliminating the lease for Kingswood School and moving the school to an existing campus and reducing the funding for supplemental digital resources.

“The board fully intends to comply with all laws and regulations related to budgeting, management and expenditure of public funds, and remains committed to ongoing transparency and cooperation throughout its budget development and management process,” according to the letter.

The letter response comes after both the NCDPI and the N.C. State Auditor’s Office sent letters to WS/FCS about the Winston-Salem/Forsyth County Schools’ recently-revealed budget shortfalls, threatening audits and sanctions.

The state board’s letter revealed that the WS/FCS 2024 audit showed

• A decline in the unassigned fund balance of approximately $17.7 million, leaving the district with only $5.39 million, or 0.7 percent of its expenditures.
• A decrease in student membership of approximately one percent but an increase in total expenditures of $48.8 million or approximately seven percent.
• Over $16.2 million in expenditures that were not in the budget, including $9.6 million more from the general fund than had been appropriated, $1.6 million more spent from federal funds than appropriated and $5 million more spent from the Child Nutrition Fund than appropriated.

WS/FCS announces interim chief financial officer

Freida Lashmit has been appointed as Winston-Salem/Forsyth County Schools interim chief financial officer through June 30.

Lashmit will step into the role to provide experienced leadership and support to the Finance Department during this transitional period. She brings more than 30 years of service to the district’s finance department, having held various roles throughout her tenure.

She previously served as the interim chief financial officer from June to December 2019.

To help ensure a successful fiscal year-end closeout, WS/FCS is partnering with HIL Consultants to provide additional guidance and support. The district will begin the process of advertising for a permanent chief financial officer for the 2025-2026 school year.