Winston‑Salem/Forsyth County Schools asks county for $8.5 million in reallocation and new funds as officials outline shortfall and Article 46 issues

Winston‑Salem/Forsyth County Schools interim Superintendent Dr. Caddy Moore told the Forsyth County Board of Commissioners on Aug. 11 that the district will request two budget actions at the board’s Aug. 14 meeting: a $3,800,000 reallocation of unspent capital outlay funds and an additional $4,700,000 in county funding to address the district’s fiscal‑year 2025 budget shortfall.

Why it matters: The district said the combined proposal draws on project savings and other available funds to reduce an operating shortfall that state actions and timing have increased. Commissioners and the district discussed multiple revenue and liability questions, including an outstanding balance owed to the Department of Public Instruction (DPI) and unresolved vendor debts.

Shortfall, state billing and appeal process - Dr. Moore told commissioners that the district’s estimated shortfall billed by DPI has declined from prior estimates and that the most recent DPI correspondence placed the amount owed at $11.3 million. Moore said DPI will begin charging 1% interest per month on any balance remaining after Sept. 20, and she described a formal appeal path: the district’s board chair can request a hearing before a State Board‑appointed panel, which will recommend action to the full State Board of Education. - Commissioners asked whether the district had calculated interest owed on specific withheld funds such as approximately $2.0 million in child nutrition payments; Moore said she would provide that detail to the commissioners.

Article 46, local supplements and payroll reporting - Dr. Moore reviewed the district’s long‑running use of Article 46 funds (state law revenue allocated to local teacher supplements) and the local supplement structure. She said Article 46 funds and the county’s local supplement historically were paid together on paychecks but that the district will separate the Article 46 line from the local supplement on payroll so the sources are visible. - Moore explained that Article 46 supplements were implemented as a flat amount (initially $200 per month, later $300) and that a temporary increase to $360 in one year was funded from accumulated Article 46 savings but later returned to $300. She said earlier local decisions to use Article 46 to boost pay for veteran teachers produced a subset of higher supplements that do not apply to staff who joined the district later, creating complex payroll and budget administration challenges. - The superintendent said reconciliation reports on Article 46 usage had been requested previously and not provided; she told commissioners that the district has begun producing the requested reports and will provide them regularly.

Vendor debt and other liabilities - Commissioners pressed Dr. Moore and staff about vendor debt. The superintendent said the district’s vendor debt totaled about $15.16 million, with roughly one‑third owed to the county and a single substitute‑management vendor accounting for approximately $6.1 million of that total. Moore said two other major vendors are willing to work with the district on repayment terms while substitute‑management debt remains urgent. - The district asked the county to consider flexible approaches to past indebtedness; commissioners discussed options including offsets against future appropriations and possible forgiveness or phased repayment, but no action was taken at the briefing.

Operational adjustments and personnel impacts - Moore said staffing reductions already made for the new school year will reduce payroll obligations, but she warned there will still be budgetary pressure and that further adjustments and accountability measures will be needed during the FY2026 process. Commissioners asked the district to track and report on impacts to students and to provide quarterly reconciliation reports to the county (the county budget ordinance requires quarterly reporting). - Moore also proposed an administrative change to streamline payments for school resource officers and exceptional‑children nurses. She asked the school board to request a formal reduction in the district’s local appropriation so those funds can remain with the county and be paid directly, rather than routing the money through the district and back to county agencies.

What commissioners requested - Commissioners asked for more detailed reconciliations of Article 46 revenues and expenditures, a clearer explanation of how the teacher supplement columns were applied to different employee groups, and specifics on interest calculations for withheld state funds. The county requested the district provide the reconciliation reports on a schedule consistent with the county budget ordinance (quarterly).

Context and next steps - Moore said the district will seek the board’s approval of the reallocation and additional funding at the Aug. 14 County Commissioners meeting. She also said the district is pursuing State Board appeals and meetings with the local legislative delegation in September to discuss state‑level remedies. - Commissioners and district staff indicated more budget detail and monitoring updates will be required in the coming months as FY2026 planning advances.

Sources: Presentation and Q&A with Dr. Caddy Moore, interim superintendent, Winston‑Salem/Forsyth County Schools, at the Forsyth County Board of Commissioners briefing on Aug. 11, 2025.