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CHCCS board accepts clean audit, adopts 2025–26 budget resolution
Summary
The Chapel Hill-Carrboro City Schools Board unanimously accepted an independent audit showing no material weaknesses and adopted the 2025–26 budget resolution that includes a 3% salary reserve amid state budget uncertainty.
The Chapel Hill-Carrboro City Schools Board of Education on Tuesday unanimously accepted the district’s independent financial audit for the year ended June 30, 2025, and adopted the budget resolution for fiscal year 2025–26.
The board heard a presentation from Dale Smith of Anderson Smith & Wike, the district’s contracted auditor, who said auditors issued a clean (unmodified) opinion on the financial statements and reported no material weaknesses or significant deficiencies in internal-control testing. “We were happy to report that there were no material weaknesses or significant deficiencies noted in the testing that we performed,” Smith said during the presentation.
Smith highlighted that the district corrected a prior-year Title I finding and that the fiscal year produced a positive change in total fund balance of $360,004.25. He noted, however, that the unassigned fund balance remained negative (reported in the audit at roughly $294,000), and recommended steps to rebuild reserves. “We’d like to see y’all increase your fund balance,” he told board members, adding that a healthy level for a district of this size would be in the multi‑million‑dollar range.
District finance staff then reviewed the proposed 2025–26 budget. The administration told the board it had built the budget with a 3% salary reserve to cover potential state-mandated raises once the General Assembly finalizes its actions. Finance staff said prior cost‑saving measures — including earlier tiers of a reduction‑in‑force plan — and spending controls had positioned the district to present a balanced plan, while cautioning that falling average daily membership and state revenue volatility could erode projected savings.
Board members pressed for clearer personnel classifications after staff cited a rise in “officials, administrators and managers” in the state FTE report; staff agreed to provide a side‑by‑side explanation of position classifications submitted to the state. "We are required by law to post all central office positions and salaries," staff noted, and offered additional transparency materials for the board and public.
After discussion, the board moved and seconded approval of both the audit and the 2025–26 budget resolution; both motions passed by unanimous voice vote.
Next steps include posting budget documentation and reporting first‑quarter financial results to the board.
