Lee County Schools audit shows clean financials despite embezzlement case, sparks renewed calls for transparency and funding reform

State Auditor Dale Smith presented the 2024-2025 financial audit at the Lee County School Board of Education Dec. 9 meeting.

The general fund balance on June 30, 2025, was $7.9 million, with a $35,000 increase from last year. After liabilities were deducted, the board had $4.6 million available for appropriations.

Smith said the audit revealed a score of 1-3 for its financials, which meant the audit was clean and free of errors.

“The North Carolina Office of the State Auditor (OSA) is conducting an investigative audit of Lee County Schools focused on potential misappropriation of funds. The district was notified earlier this week through an engagement letter sent by OSA,” reads a press release dated March 19, 2025.

On March 20, 2025, a school payroll supervisor was charged with embezzling $190,000.

Smith said the embezzled funds came from a mix of state and federal funds over a period of three years. He provided a process plan for the board to implement to reduce risk.

The board discussed investing cash balances for individual schools to limit access for embezzlement.

The board had a clean compliance report.

Smith said the internal report had one finding in account reconciliations. An investigation revealed it was due to staff turnover resulting in a delayed ledger entry. The issue was resolved, and he said they needed to have a plan in place to prevent the time-related issue from recurring.

Chairperson Sherry Lynn Womack requested the audit reports be made available at least four days prior to the board meeting to allow review and uploading for transparency for the public, and Smith agreed.

The Oct. 2026 financial report shows a 2025-26 budget of $122,143,857.35, with $37,888,574.49 in expenditures. The district has $4,694,459.85 held for future expenses, resulting in a budget of $79,560,823.01.

Member Megan Parsons announced her departure from the district to care for aging parents and used the moment to clarify her perspective on several topics.

Parsons called on county commissioners to embrace the Five-on-Five Committee invitation to improve communication, collaboration and transparency and to address capital needs in coordinated action.

The group has not met even once.

“Step up, honor the agreement they made and engage with the Five-on-Five Committee,” Parsons said when addressing the county commissioners, “Adopt a thirty percent funding budget,” she added about the county’s chronically under-funded school district.

The committee includes three county commissioners, three board of education members, the county manager, the superintendent and both county and school finance officers.

At the Nov. 4 meeting, Womack shared her perspective on the committee.

“We owe this to the people,” Womack said about there not being a first meeting and no progress in its commitment to the public to work together for the children. “The number one reason you wouldn’t want to do it [meet] is because you don’t want transparency.”

Parsons said charter and private schools were not options for slack funding for public education.

She said the district’s staff needed pay raises, not mere recognition.

Womack asked for Parson’s statements to be recorded in the minutes.

Superintendent Dr. Chris Dossenbach shared the good news that the district paid back Lee County Government the $22,678,064 debt from 2010 for improvements to Lee County High School and was eligible to purchase the property now for one dollar.

Member Eric Davidson donated the required dollar.

The Discipline Committee reported that adding more movement throughout the day would decrease discipline problems. It created a guide for teachers to implement more movement.

The next meeting is Jan. 13, 2026.

Dec. 10, 2025

Stephanie M. Sellers

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