To provide up-to-date and transparent information about the district’s financial condition, this is the February 4, 2026, Community Budget Update.
Internal Controls Review
Today, Superintendent Don Phipps presented the State Board of Education with an action plan to further improve the district’s financial processes.
The NC Department of Public Instruction engaged the firm Mauldin & Jenkins in November to review WS/FCS internal controls, workflows and government oversight. The review cost the district $97,770.
The firm interviewed 17 people, analyzed 200+ documents and visited WS/FCS offices to do some on-site testing to assess adequacy and effectiveness of controls, fiscal policies, the enterprise resource planning system, and measures implemented since the deficit was discovered in May.
Mauldin & Jenkins’ final Observations & Recommendations Report includes 10 recommendations and a four-phase Implementation Roadmap.
“We’ve used this as a blueprint and a guidebook to help us figure out what our structure looks like and what we want to do,” Phipps told the board. “We’re also doing budget to actuals every month with our board in our Finance Committee meeting.... There shouldn’t be any surprises that happen. If there is an area that seems to be a red flag, we should know that early on, and right now our numbers look exactly like they should.”
The current internal control environment “is characterized by a state of ‘fragility’ due to a system transition, actions taken to address the budget crisis, severe staffing shortages, and a cultural shift from informal ‘workarounds’ to strict compliance,” according to the Mauldin & Jenkins review.
The review notes that the district has taken significant steps to address the root causes of last year’s deficit, including systems that prevent spending when no funds are available, overriding budgets, and failing to budget for multi-year contracts. It also says the district has made “noteworthy progress” in addressing the issues identified in the State Auditor’s Rapid Response report from August 2025.
The WS/FCS action plan addresses the Mauldin & Jenkins recommendations and provides estimated timelines for completion.
The key action steps for the district include:
Prioritizing hiring a Chief Financial Officer, Payroll Director and Executive Director of Finance. The district is already interviewing candidates for the director roles and has increased the salary and recruitment efforts to attract qualified candidates for CFO.
Developing SOPs and process workflows. This work is already underway.
Creating an Audit Advisory Committee. WS/FCS and Forsyth County are currently accepting applications from volunteers who wish to serve on this committee.
Creating an Internal Audit Function. This would further provide internal oversight.
State Board Vice Chair Alan Duncan said it was a very helpful report.
“We look forward to continuing to support the work of the Winston-Salem/Forsyth County Schools,” Duncan said. “We appreciate the work that is obviously going into the recovery plan and the work of the auditing firm.”
Review the firm’s presentation to the state board, or read the full Mauldin & Jenkins report for more details.
Strategic Priorities
WS/FCS is seeking feedback from the community as it works to finalize its strategic priorities for the next two years.
Take the online survey to help identify the areas of highest need as the district develops the Fiscal year 2026-2027 budget: English, Spanish. The survey closes February 11.
The survey also asks for feedback to help finalize the district’s new strategic plan. Families, staff and community members are also invited to discuss the district’s 2026-2028 Strategic Plan priorities in person from 6-7 pm, February 17, at the Education Building, 4801 Bethania Station Rd., Winston-Salem. RSVP to attend.