“There has been some confusion around this point, so we should be clear: There was no fraud or misappropriation. Every single dollar was spent on an appropriate expense for children and school system services.” 

Interim superintendent Catty Moore released this statement alongside the state auditor’s final report findings. The months-long investigation sought answers as to why the district ended its 2025 fiscal year with a $46 million budget deficit. 

In the WS/FCS response to the report, it agreed the deficit “was the result of years of poor accounting practices and lack of financial management. WS/FCS accepts accountability for its financial mistakes and will take all necessary steps to restore the financial health of this district.”

The audit highlighted seven main issues:

“[Office of the State Auditor] found that WS/FCS is running a deficit because:

1. The District failed to adjust its full-time equivalent (FTE) staffing despite a decrease in its student population;
2. The District used temporary COVID-era funds to pay staff salaries and did not remove positions when the temporary aid ended;
3. The District regularly approved purchase orders that exceeded its account budgets and did not later revise these budgets;
4. The District did not reconcile budgeted and actual revenue and expenditures in a timely manner. As a result, no corrective action was taken when there was a material difference in budgeted and actual revenue and expenditures during the fiscal period;
5. The District did not reassess COVID-era bonus payments to ensure alignment with current financial conditions and fund availability;
6. The District inappropriately uses suspense accounts—temporary holding accounts intended for transactions that could not be immediately classified—as fund equity or fund balance accounts across multiple funds; and
7. The District did not adequately consider its contracts when creating its budget.

Beyond these findings, [the Office of the State Auditor] assessed that the WS/FCS Financial Services Department’s failure to correct prior audit findings has contributed to poor accounting procedures, budgetary practices, and the FY 2025 budget shortfall.”

The district partly blames high turnover in the finance and HR departments and having four different CFOs and superintendents since 2017 for the lack of consistent internal processes and succession planning. 

Moving forward, WS/FCS says, “The current wave of positions reductions will be complete by December 1, 2025. An additional reduction may be needed next spring, to be completed by August 1, 2026, for the 2026-27 school year. The District will conduct annual reconciliations of formulas and enrollment every fall.”

Read the full 39-page report here. 

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