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An independent audit of Durham Public Schools’ finances during the controversial 2023-24 academic year reveals problems with bank account reconciliation, delayed purchase orders for expenses, pay issues with certified employees, and the loss of more than $900,000 in unused funding for unfilled career and technical education (CTE) teaching positions.
The accounting firm auditing DPS, Anderson, Smith, and Wike, found that the district used fewer CTE positions than had been allocated in state funds. As a result, DPS left about $1 million in state funding on the table.
“We recommend that management closely monitor its state position and dollar allotments through the year to ensure that the district is fully maximizing the funding that is available from the state,” the audit firm wrote.
The audit’s findings – and the district administration’s responses to those findings – are on the agenda for Thursday’s Board of Education work session.
Superintendent Dr. Anthony Lewis and Chief Financial Officer Jeremy Teetor assumed their roles well after the disastrous series of events that led to the departure of their predecessors: Superintendent Pascal Mubenga and Chief Financial Officer Paul LeSieur.
Under Mubenga and LeSieur, DPS hired consultants to conduct a salary study that led to inaccurate estimations and misapplication of a new pay scale, which led to overpayments to classified staff.
Employees revolted against talk of clawing back those payments and against changes to how relevant work experience was calculated, negating raises. They walked out of work, so schools were understaffed and parents on short notice found themselves driving children to school.
Lewis arrived as new superintendent to help clean up the mess on Aug. 12, 2024. Teetor came aboard on Nov. 4, the week after the audit for 2023-24 originally had been due.
Besides coping with the audit project, the new administration found itself struggling to rectify the 2024-25 budget shortfall, clearing up unpaid obligations from 2023-24, managing daily financial operations for 2024-25, and preparing the budget request for 2025-26.
The presentation developed by Lewis and Teetor addresses the audit findings and provides staff action where applicable:
Bank Account Reconciliation
The district didn’t properly reconcile bank accounts and other general ledger accounts in a timely manner. Also, the district didn’t properly prepare contract summary schedules for construction in progress.
Staff Action: Bank reconciliations are current for 2024-25, and work is underway for July 2025 statements. Accounting staff are more diligent about recording items that affect the general ledger. The accounting department has new leadership. Staff dedicated to construction accounting saw duties realigned to provide a tighter focus.
Delayed Purchase Orders
The audit noted numerous instances where an expenditure was made before a purchase order was completed.
Staff Action: Finance team seeks continued support from leadership throughout the district to deal with staff that don’t follow purchasing protocols.
Excessive Expenditures Recorded
During the year, the district incurred expenditures that exceeded appropriations from the Local Current Expense Fund (nearly $6.7 million), State Public School Fund ($1.5 million), and Local Special Expense Fund ($12,315).
Staff Action: The new budget team adopted best practices to avoid repeating this for 2024-25 and beyond.
Missed Audit Deadline
DPS couldn’t provide final financial records to complete the 2023-24 audit by the required due date.
Staff Action: The finance department started sharing files for the 2025 audit immediately after the fiscal year closed and is on track to complete this audit on time.
Workers Compensation Miscalculation
The district didn’t properly calculate and report the self-insured workers compensation liability in the June 30, 2023 financial statements.
Staff Action: DPS retained a workers compensation actuary to calculate the 2024 liability and will do so again for 2025.
District administrators also are responding to observations in a management letter from the audit about several items, including:
Overpaid and Underpaid Employees
Finance completed the 2023-24 year with $194,542 underpaid and $152,879 overpaid to nearly 2,200 certified employees.
Staff Action: Reduced to 321 by June 30, 2025. More than 200 appear to be issues with the new salary/licensure system. The district is working to address the remaining 100 or so by the end of September.
Reverted CTE Employment Pay
The district reverted 117 months of CTE employment pay ($911,959) in 2023-24.
Staff Action: DPS “reduced this to 7.8 months in 2024-25 while exhausting every ethical measure possible.” Collaboration and planning between finance, human resources, and the academics teams “will be even better for 2025-26.”
External Auditors for Traditional Schools
Teetor asked that all traditional DPS schools get a review from the external auditors, who made recommendations for improvement and encouraged more training.
Staff Action: School treasurers had their first meeting in two years in March. A school treasurer advisory committee formed to understand issues experienced by school treasurers in DPS. New treasurers and those needing a refresher had a training session on Aug. 7. The district is developing a new treasurer manual. Also, the district is “actively searching for a new Internal Auditor to support all of this work.”
Aberrant Increases in Invoices
The district observed $4.4 million in invoices paid after the fiscal year closed, for a 340% increase.
Staff Action: “As a result of current procedures and expectations, this metric stands at $592,253 as of Aug. 4, 2025, and more in line with fiscal years prior to 2023-24.”
Budget Resolution Mismatch
The beginning budget resolution for 2023-24 didn’t match the beginning budget in the financial system.
Staff Action: The new budget team adopted procedures to prevent a repeat of this issue.
Concussion Protocol Documentation
External auditors tried but failed to find two concussion awareness forms, and two others weren’t signed.
Staff Action: The district athletic director has implemented procedures for tighter review. The new internal auditor, once hired, also will have oversight of these documents.
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Author: Wes Platt
Lead storyteller. Game designer and journalist. Recovering Floridian. Email: southpointaccessnews@gmail.com.
