Audit flags, federal funding cliff and payroll overruns put district budget under pressure; board hears options including central-office reductions

An unmodified audit opinion accompanied a detailed briefing to the Winston-Salem/Forsyth County Board of Education on the district's fiscal year 2024 finances, but auditors and staff told the board that a steep fall in pandemic-era federal money and payroll overruns left the district drawing down fund balance and facing near-term savings choices.

Auditor Tyler Beatty, the engagement partner, said the district's federal funding dropped about $40 million between fiscal 2023 and fiscal 2024, largely because education-stabilization (ESSER) money declined; ESSER spending fell by about $44 million. "We are issuing an unmodified opinion on the financial statements," Beatty said, while noting three findings in the governmental audit: a deficit in a special revenue fund, budget violations and reconciling adjustments identified during the audit.

Why it matters: the district used fund balance to offset federal revenue declines, driving total fund balance from about $25.2 million at 7/1/2023…