Winston-Salem/Forsyth County Schools is taking critical actions to address a budget shortfall which will be higher than the district previously projected. The exact figure is still being determined. Superintendent Tricia McManus, the Board of Education, and the school finance firm HIL Consultants are working on a plan to meet the district’s financial obligations for this year, including payroll.
“Our top priority is to ensure all staff members are paid through the end of the fiscal year, June 30,” McManus said. The district plans to provide more information early next week.
In March, McManus provided a list of $8 million in savings to balance the current year budget and $16 million for next year. McManus said the financial projections provided by the Finance Department indicated those cuts would be sufficient to balance the district’s local fund.
The district hired HIL to gain a full picture of the district’s current financial landscape. The consultant’s preliminary analysis, provided to the superintendent Thursday, revealed the district is overspending in state funds that cover personnel costs. McManus said she was not aware of that when she provided the financial update in March.
“Maintaining the financial health of Winston-Salem/Forsyth County Schools is of utmost importance to district. To make the best financial decisions, you need to have accurate fiscal projections. As hard as it is to eliminate positions, we would have done more before this year if we had known we were overspending,” McManus said. “If we had accurate projections, we would have made different decisions.”
The district has added hundreds of jobs to support the increased needs of students since 2019. At the same time, the pandemic spurred a loss of student enrollment, which led to less state funding for staff salaries. Temporary funding provided by the federal government for COVID relief and two years of the state holding districts harmless for enrollment declines provided extra funds to cover the staffing overages.
The consultant is working to review and analyze local, state, and other funds to estimate deficits and fund balances and recommend potential cost savings. McManus and the board are working to determine the next steps needed to balance the budget for the current year and Fiscal Year 2025-2026. The district has already implemented $21.5 million in cost savings for next year.
“Our community places its trust in us to manage public funds with accuracy and accountability. We did not meet that standard. We are already taking corrective action. Our goal is not only to fix past issues, but to rebuild trust and ensure this never happens again,” McManus said.
The district is cooperating with the NC Department of Public Instruction and NC Auditor on their requests for additional information.
McManus accepted the resignation of Chief Financial Officer Thomas Kranz. His last day is May 9. McManus will appoint an interim chief financial officer while the district looks for a permanent replacement.
While McManus is retiring in June to spend more time with her growing family, she said she remains fully committed to resolving the financial issues. She said the district’s budget issues played no role in her decision to retire. She announced to the board April 17.