The Wake County school board discussed the district's latest audit on Tuesday before lamenting some inflation-driven challenges to replenish the district's diminishing savings noted in the audit.
The audit, conducted by Greensboro-based Forvis Mazars, didn't find any major compliance concerns.
Other WRAL Top Stories
"The audit shows that for the past 37 years, Wake county has been good stewards, and we will continue to be good stewards" of taxpayer dollars, Board Chairman Tyler Swanson said.
State law requires local governments to obtain an independent audit every year.
The district has faced some budget challenges in the past year due to rising costs and planning for state salary increases, which would require the district to raise locally funded employee salaries. State lawmakers have not passed a budget for the current fiscal year, and school districts are planning next year's budget based on assumptions about what raises could be.
Those costs have risen faster than what the federal Consumer Price Index shows, because that price index is based on typical purchases of an average resident, rather than the purchases of a school or business entity, said David Neter, the district's chief business officer.
Without increasing what the district does, leaders are planning for $35 million in additional costs next year, Superintendent Robert Taylor said.
The district has also increased some expenses in recent years to address a competitive market in teacher recruitment and mental health challenges among young people, by paying teachers extra for having a Master's degree and by adding student support professionals.
Increased costs without significant revenue increases has lead to the board slowly depleting its savings.
Those savings were $37 million after the 2024-25 school year, the audit noted, down from about $39 million the year before that. The district's goal for savings is 6% of county funding. Meeting that goal would require the district to set aside another $7 million, said Trisha Posey, district finance officer.
State and federal funding are generally restricted in their use in comparison to county funding. State and federal dollars are distributed via pots of money intended for specific things and typically cannot be used for any other purposes. So if a school can't hire a state-funded teacher for a certain subject area, for example, they could not use that funding to pay for a non-teaching employee and would revert the funds back to the state instead.
"All these funds don't just flow into one bank account where we can pick and choose how we spend them," Board Member Chris Heagarty said.
For this budget year, they cut some costs, including vacant positions and some heating and cooling expenses. Leaders have proposed a budget for this year, but are mulling a proposal now after soliciting budget requests from district departments.