The Alamance-Burlington school system ended the last fiscal year on June 30, 2025 in the black, ending with $3.7 million in unassigned fund balance, or rainy-day savings, based on the preliminary results of the school system’s financial audit for 2024-25.
The school system’s audit for 2024-25 will, however, remain in its current draft form until the federal government reopens, the auditor, Dale Smith of the Anderson Smith & Wike accounting firm in Rockingham, told school board members during their work session Tuesday afternoon.
North Carolina’s Local Government Commission (LGC), which is part of the state auditor’s office, issued a memo last month, explaining that the shutdown had delayed the release of the federal Office of Management and Budget (OMB) “Compliance Supplement” for 2025.
No local governments and agencies that undergo “single-process” (or comprehensive) annual audits are allowed to finalize their audits “until that federal supplement is put out,” Smith told school board members during their work session.
Meanwhile, Smith – who earlier this year had delivered a damning report on the school system’s audit for the previous, 2023-24 fiscal year – gave a glowing report Tuesday afternoon on the school system’s finances for the fiscal year that ended June 30.
ABSS had ended the 2023-24 fiscal year with a $1.6 million deficit in state funding that had to be repaid to the state by the end of this June and incurred $3.2 million in budget violations that resulted in four findings and questioned costs during the 2023-24 fiscal year, the auditor told the board at its January 2025 work session. (Completion of that year’s audit was delayed by several months due to widespread turnover in the ABSS administration, school officials said earlier this year.)
Overall, total fund balance within the general fund ($3.9 million) increased by about $5.6 million from the previous fiscal year, “which was a negative $1.6 million,” the auditor said.
“Y’all have a little bit of breathing room,” Smith said, acknowledging that while there is no statutory requirement to designate a certain percentage of money as fund balance, he recommended getting it to around $6 or $7 million in order to cover any emergencies. “Y’all are definitely headed in the right direction,” the auditor said.
School board vice chairman Dan Ingle replied, “Hallelujah,” before thanking the finance officer and superintendent for their efforts. “Seeing those four [findings] gone now, never to return, [is a relief],” he said.
The findings outlined in the 2023-24 audit were deemed to have been material weaknesses.
- Failure to adopt a budget resolution and subsequent budget amendments before encumbering expenses, ultimately resulting in a budget deficit;
- Entering into contracts for mold remediation in the fall of 2023 without first obtaining and appropriating funds to cover the costs of the contracts;
- And failing to adopt a budget resolution and subsequent budget amendments prior to encumbering expenses, which also resulted in ABSS going over its budget in 2023-24, as well as during the previous 2022-23 fiscal year.
The auditors had identified a fourth violation, which they deemed a significant deficiency during the previous 2023-24 fiscal year that ended on June 30, 2024: failing to reconcile School Food Service (i.e., child nutrition) accounts in a timely manner.
In contrast, the “clean, unmodified opinion” that ABSS received from the auditors for the 2024-25 fiscal year is “exactly what you want to receive,” Smith told the school board Tuesday afternoon. “We are very pleased with what we saw this year…We had quite a few issues reported the past year or two; we were great with what we saw.”
Tony Messer, the school system’s assistant superintendent of finance, told The Alamance News during a break in the meeting on Tuesday afternoon that ABSS had decided not to spend its state-funded low-wealth allotment once it became clear this spring that the allotment would be reduced by about half this year (from approximately $10.5 million to $5.8 million).
No second severance payment for former superintendent
Meanwhile, other ABSS officials confirmed for The Alamance News Tuesday afternoon that former superintendent Dr. Dain Butler had not received a second severance payment of $116,362, as outlined under the terms of his March 4, 2024 resignation agreement.
Butler received an initial severance payment of $102,038 after he resigned.
However, the second severance payment was made contingent on the availability of unassigned fund balance following the completion of the 2023-24 audit – which ultimately revealed that ABSS had ended the year with a deficit and violated multiple provisions within the state’s School Budget and Fiscal Control Act.
Had he received them, the two severance payments would’ve represented the equivalent of Butler’s $218,400 annual salary during his 20-month tenure as superintendent of ABSS.
Butler is now employed as an assistant principal with Nash County schools.
