Winston‑Salem/Forsyth board hears plan to close $42 million shortfall, considers transportation and school staffing cuts

Interim Superintendent Kathy Moore told the Winston‑Salem/Forsyth County Schools Board of Education on June 10 that a post‑audit review and other reconciliations identified an approximately $42 million deficit for fiscal 2024‑25 and presented planned reductions for 2025‑26 intended to balance next year’s budget.

Moore said the $42 million figure was determined after a review done with an outside partner and a line‑by‑line look at allotments, invoices, charter payments and other items. She told the board that a combination of state allotment overspending (including PRC003 non‑instructional allotments), unbudgeted contract costs, underbudgeted charter school payments and rolled‑over invoices produced the shortfall. “All of these funds provided direct services to students,” she said, adding the shortfall reflected oversights and miscalculations.

Moore said staff has identified about $39 million in reductions and savings for 2025‑26 and additional one‑time items that together approach roughly $45 million in budget relief. The package includes: eliminating district‑funded transportation for students exercising school choice except for magnets and residential placements (projected savings about $3.5 million); a school‑based staffing reduction plan that the district estimates will reduce central and school positions (a planned $8.75 million reduction tied to allotment adjustments); converting some contracts and subscriptions to lower‑cost alternatives; a 10‑month rather than 12‑month contract for school resource officers; and other operational cuts. Moore said the reductions are within superintendent authority and are already in motion for items that do not require board approval.

Board members pressed for more detail on the potential community impact of cutting choice transportation. Board member Barr said he worries that removing transportation could reduce district enrollment because charter and private schools do not typically provide comparable transportation. Vice Chair Bohannon and others urged the board to weigh the likely effect on families who rely on choice buses. Moore noted approximately 5,500 students choose schools outside their residential zone at the elementary and middle levels; about 3,500 of those were registered for transportation and roughly 2,500 actually used the service this year.

Moore described other specific revenue actions to reduce the immediate cash shortfall: using roughly $2.8 million from available checking and money‑market transfers and expected reimbursements (Medicaid, grants, indirect cost recoveries) that she estimated could bring in another $4.5–$5.0 million by June 30. She also asked the board to authorize an interim appropriation to access the Child Nutrition enterprise fund balance — at least $4 million and up to $6 million — to help pay vendors in arrears, with a written repayment plan. The board approved the Child Nutrition fund request on a motion and subsequent vote.

School leaders and public commenters urged transparency and called for follow‑up: several members of the public blamed prior administration and asked for forensic review. Board members asked county officials for prior to consider whether one‑time county assistance should be requested again; Moore said county commissioners had declined a prior request and that further conversations would be needed. Moore said she would continue weekly budget updates to the board and community and proposed an interim budget resolution on June 24 to set staff authority to operate within the reduced 2025‑26 budget.

The board also voted on a sequence of budget‑related action items during the June 10 meeting, including approval of several budget amendments and transfers and authorization to use Child Nutrition fund balance (the board approved the Child Nutrition request unanimously). Moore said the goal is to have all vendors with current invoices paid by June 30, with exceptions for three large vendors (the ESS substitute management contract, custodial services contractor SSC, and county pass‑throughs) for which staff are negotiating payment plans.

Moore repeatedly emphasized that “we have to make decisions and choices” to restore the district’s financial stability and rebuild fund balance. She said that, if needed, staff would later request specific reinstatements of particular programs or positions with precise justifications rather than restoring items ad hoc.

The board’s discussion included several requests for follow‑up: more detail about the school‑level allotment model, a list of digital subscriptions proposed for elimination, the specific effect on individual schools of ending choice transportation, and documentation of the district’s PRC allotment calculations. Board members asked staff to return with more granular reports and requested the interim budget resolution on June 24 to set the district’s operating authority for July 1.

Moore also told the board she and the district are investigating possible federal withholdings owed to the IRS and other potential late payments that could add to the district’s obligations; the district has opened inquiries and said it will report findings when completed.

Ending: The board did not vote on restoring any of the proposed reductions on June 10. Moore said the next steps are weekly budget updates and adoption of an interim budget resolution at the June 24 meeting to begin operations within the reduced plan for 2025‑26 while continuing follow‑up with the county, auditors, and state officials.