Tuscaloosa City Schools audit finds no findings; CSFO warns of budget deficit, sales-tax dip and heavy bus costs

The Tuscaloosa City Schools Board of Education on May 20 received an external audit with no findings and heard a financial update that highlighted a multi‑million‑dollar operating deficit, a year‑over‑year sales‑tax decline and ongoing high costs for school buses.

Peter Fisher, the auditor presenting the report for the state examiners’ office, said the board’s 2023–24 financial statements and its major federal programs received unmodified opinions. “We’ve issued an unmodified report on the board’s financial statements for the year ended 09/30/2024,” Fisher said, and he named the Innovative Approaches to Literacy Grant and the COVID‑19 Educational Stabilization Fund as the major federal programs reviewed. He said the audit report, published April 18, 2025, is available at www.examiners.alabama.gov.

The board’s chief school financial officer, Jay Duke, told trustees the district is roughly 41–42% through the fiscal year but is operating with a multi‑million‑dollar budget deficit. “Keep in mind we’re operating at about a $7,000,000 deficit,” Duke said, later noting an $8,000,000 figure when describing the scale of the budget gap. He described the new RAISE Act funding as a partial mitigation—“about a $1,700,000 boost to the Tuscaloosa City Schools”—but said those funds will be earmarked for specific student populations.

Duke pointed to a decline in local sales tax receipts compared with the same period last year, calling it the first such drop in several years. “Sales tax . . . $10,405,000 is less than the same period last year,” he said, and added online sales flows (SSUTA dynamics) mean some taxable activity does not benefit the city/district. Duke also described major planned bus purchases, reporting the district is buying 49 buses and that bus procurement is an unusually large near‑term expense. He cautioned that state school‑bus funding lags local costs: “We get $75,000 for a school bus, but we have to pay $137,000 for a school bus,” a gap he said increases local pressure on the budget.

Duke said the district spends roughly 72% of its operating dollars in the classroom (instructional services and instructional support services) and that general administrative services are about 4% of expenditures—better than the state recommendation of 5%. He also noted the district pays about $10,000,000 per year in debt service.

The audit presentation cited the Code of Alabama 1975 and federal Uniform Guidance for audits of federal awards; Fisher invited questions and directed any follow‑ups to the examiners’ Montgomery office. Board members praised staff for achieving an audit with no findings.

Board members did not take formal board action on the audit other than to receive the report; financial figures and budgetary recommendations will remain part of ongoing fiscal planning.