RALEIGH — The North Carolina State Board of Education unanimously approved an internal controls review contract involving Winston-Salem/Forsyth County Schools during a special called meeting last Monday.
The accounting firm of Mauldin & Jenkins was selected to perform the six-month review of Winston-Salem/Forsyth County Schools (WS/FCS). The contract’s total value is listed as $97,770, and a report is due by Dec. 31 and a public presentation by Feb. 15, 2026.
The request for proposal for the review states two goals: to independently evaluate whether WS/FCS’s current controls, including any newly implemented controls and policies, are effective and sustainable, and to ensure that current controls and corrective measures implemented effectively address past deficiencies and prevent recurrences.
The internal controls review stems from WS/FCS’s nearly $46 million budget deficit for fiscal year 2025, as reported by the North Carolina Office of the State Auditor (OSA).
The OSA’s Rapid Response Report detailed seven major areas of concern that contributed to WS/FCS’s budget mismanagement.
- More than $75 million in bonuses disbursed as WS/FCS overspent annual revenue during fiscal years 2022 and 2023
- COVID-era temporary federal funding was used to support staff salaries, but when the funds ran out, WS/FCS absorbed the costs instead of removing positions
- Failure to adjust full-time staffing levels despite declining student enrollment
- Purchase orders exceeded budgets; 311 budget overrides were involved
- Failure to reassess COVID-era bonus payments
- Misuse of suspense accounts
- Creation of annual budget lacked a full review of contractual obligations
The Rapid Response Report also noted that WS/FCS failed to take corrective actions regarding prior audit findings, which exacerbated the district’s budget issues.
In September, a three-member panel of the State Board of Education approved an extension to the grace period to Nov. 20 for the $3.4 million WS/FCS owes to the North Carolina Department of Public Instruction (NCDPI).
At that meeting, the board unanimously approved a motion for NCDPI to investigate the internal financial controls used by WS/FCS leading to the October approval of the Mauldin & Jenkins contract.
WS/FCS owed the State Public School Fund more than $11.3 million as of the end of June. In July, the district’s request to NCDPI to waive any penalties was rejected.
A motion by State Treasurer Brad Briner amended the panel’s recommendation by adding a 0.4% interest rate on the outstanding balance with accruals beginning Oct. 1. The State Board of Education will meet again Nov. 4 to conclude business involving the appeal filed by WS/FCS on the decision to impose interest.
