The Alamance-Burlington school system ended the 2025-26 fiscal year on June 30 in the black, with approximately $3.7 million in unassigned fund balance, or rainy-day savings, based on preliminary results of the financial audit.
The $3.7 million in unassigned fund balance that ABSS ended the previous fiscal year with represents a slight increase of about $16,000 over the amount that had been reported at the end of June 2025, based on a presentation that the school board heard last week by Dale Smith of the Anderson Smith & Wike accounting firm in Rockingham.
ABSS received a “clean, unmodified” opinion – the gold standard in accounting – of how its managed its finances in 2025-26, marking the second consecutive fiscal year for which ABSS has received a glowing report from its external auditor.
“Management [has] done a great job in the past couple of years with reversing that negative trend that y’all were in and building fund balance up to a positive level,” Smith told school board members during their work session last week.
By contrast, ABSS had reported a combined decrease of $8.4 million in unassigned fund balance during the three fiscal years between 2022-23 and 2024-25, Smith recalled last week.
However, by the end of the 2024-25 fiscal year – six months into the respective tenures of the new superintendent, Dr. Aaron Fleming and new chief finance officer Tony Messer – ABSS had accumulated $3.7 million in unassigned fund balance.
ABSS had depleted its rainy-day savings by using its unassigned fund balance to balance the school system’s budgets over multiple years, despite an inflow of approximately $95 million in federal Covid-19 relief funding through three stimulus packages that Congress passed between March 2020 and March 2021.
At the end of the 2020-21 fiscal year, which coincided with the height of the pandemic, ABSS had $3.9 million in unassigned fund balance on hand.
ABSS ended the 2021-22 fiscal year with just over $3 million in savings.
By the end of 2022-23, ABSS had $102,038 in unassigned fund balance on hand.
And by the end of the 2023-24 fiscal year, ABSS had a negative fund balance of $1.8 million, based on the financial audits that Smith’s firm had conducted for ABSS at the time.
Though there is no statutory requirement to do so, Smith advised the school system’s administrators last week to sock more money away in its rainy-day savings account.
“We do recommend trying to build the reserves up a little further,” the auditor said last week. “I do think it would be good if you can get it up to at least $6, $7, $8 million, for a district this size, just to give you a little more breathing room and a little more flexibility in case some kind of an emergency comes up…Y’all are fine where you’re at, but it would be nice to have a little more breathing room with a district this size.”
There were no problems with the Child Nutrition program and the Child Care fund, which Smith said ended the fiscal year in good financial condition.
The audit also revealed no findings, questioned costs, or weaknesses in internal controls, i.e., vulnerability in procedures that could potentially lead to financial errors, fraud, or noncompliance with state and federal laws, based on the preliminary results that Smith presented last week.
“It appears y’all are definitely taking the right steps, heading in the right direction,” the auditor said. “Y’all have turned the finances around.”
The audit remains in a draft form due to a delay in the federal government releasing a compliance report, Smith said, adding that it “should just be a formality” before the audit can be presented for approval by the school board.
