Audit update, refunds and fundraising: board adopts budget resolution after hearing auditor and finance briefings

At the Oct. 28 meeting, external auditor Forvis Mazars and interim district leaders briefed the board on the status of the 2024'025 financial-audit work and the district's budget position. The board then adopted the district's final 2025'026 budget resolution and salary schedules.

Audit update: Tyler Beatty, audit partner with Forvis Mazars, said the firm completed interim testing and was working through final field procedures for the year ended June 30, 2025. He listed open items auditors were still awaiting, including OMB compliance-supplement guidance, an actuary report for dental OPEB, and liaison with a separate internal-control engagement. In draft figures presented to the board, the district showed a combined governmental fund deficit of roughly $30.9 million in governmental fund balances excluding subsequent events; Beatty said the net change in general fund expenditures for fiscal 2025 was about $43.4 million and that prior-year fund balance of $12.8 million reduced the reported deficit to $30.9 million in draft statements (figures subject to audit adjustments).

Debt repayment and payments reported: Interim Superintendent Katie Moore updated the board on payments and fundraising. Moore said the district paid $7.925 million to the State (DPI) in August, and that a $3.4 million payment to DPI was made on the day of the meeting using funds raised by the Winston-Salem Foundation's Futures Fund and a $400,000 pledge from the Twin City Development Foundation. Moore said the county has adopted a resolution to match reductions to the county-owed portion of district debt equal to amounts raised by the Futures Fund; together the charitable donations and county match reduced a previously stated vendor total in staff materials. Moore outlined a superintendent recommendation to designate $3.5 million from within existing budgeted and available funds for debt repayment this fiscal year and to create a $2.1 million budgeted reserve for contingencies and small contract needs.

Other fiscal items: Moore reported ongoing reconciliation with the IRS and the state regarding withholding forms and some penalties; she said some penalties were removed after documentation. The State Board of Education approved an engagement of Malden & Jenkins LLC to perform an internal-controls review at a cost of about $97,770; Moore said the district is the contracting party for that engagement and that a public report on the review is expected by Feb. 15, 2026.

Board action: After questions, the board unanimously adopted the 2025'026 budget resolution and the 2025'026 salary schedules. Moore and staff said monthly reconciliations and updates would continue and that additional federal allotments and budget amendments may come through as grants are finalized.

What to watch: Auditors said they need additional items to complete the audit and that the final report will reflect payments and events that occurred after June 30, 2025 as subsequent events. The district's debt-repayment picture will change as private fundraising and county matching proceed; staff said the situation remains fluid and will be part of budget conversations for 2026'027.