Newark School Audit Flags Millions In Potential Waste. Why The Tepid Response?

Julie O’Connor, Urban education writer (NJ Spotlight)

Earlier this month, the first state audit of Newark Public Schools in more than 20 years was released and detailed millions of dollars potentially wasted on a menu of initiatives, including a new fitness gym at district headquarters, and referred some findings to state prosecutors for possible criminal investigation.

But the question now is what — if anything — happens next. The district’s leadership defiantly denied any problems, and both the Sherrill administration and Democratic legislative leaders have kept mum about any potential fallout.

State Auditor David Kaschak said his office will check back in 2028, but his role is simply to report the facts. “Whether there’s a consequence, that’s out of my realm,” he said in an interview with NJ Spotlight.

That left Republicans fuming about the state’s failure to halt wasteful spending in New Jersey’s largest district, which receives roughly $1.3 billion in state aid every year and spends on average $27,000 per student.

Republican budget leader Sen. Declan O’Scanlon called the findings “an outrageous wasting of taxpayer dollars” but said he doesn’t have much faith that Trenton leadership will intervene.

“Democrats leading the Legislature have gotten away with ignoring Newark’s practices for years,” he said. “So, my expectation is that the attitude will be, ‘Screw New Jersey taxpayers.’”

The state auditor referred “certain matters” to the state Attorney General’s Division of Criminal Justice, but did not disclose further specifics, saying the details were withheld to protect potential investigations.

The 36-page report laid out a series of questionable expenses totalling more than $35 million, including:

Spending $566,000 on a gym at the district’s downtown headquarters, staffed by a more than $80,000-a-year trainer — a facility that only seven people use daily, according to the district’s own sign-in logs Passing up an estimated $18.7 million in potential savings in 2024 and 2025 by failing to join the school employees’ health benefits plan or document that it completed the required insurance cost comparison Spending almost twice the state average in legal fees per student, totaling $4.7 million over three years Overstating enrollment by 128 students, two years in a row, leading to an overpayment of $6.7 million in state aid Paying $2.5 million upfront toward a $4.5 million property deal without competitive bids or state approval, for a stalled museum project on the district’s history Spending more than $1 million on catering, and nearly doubling $10-per-person price limits for “light meals and refreshments” at board meetings by ordering things like shrimp scampi and grilled salmon Spending over $700,000 on high school trips lacking documented educational justification Overpaying $1.3 million to preschool providers by failing to account for low attendance Forfeiting $150,000 in uncollected staff health insurance contributions.

The report also found that the district failed to do background checks on all staff before placing them in schools, putting kids at risk.

Kaschak, the state auditor, said this review wasn’t prompted by a specific complaint, but because his office can audit districts receiving at least 80% state aid and hadn’t examined Newark in 23 years due to limited staff. “It was time to revisit,” he said.

The performance review examined the district’s spending and management decisions from July 1, 2022, to May 31, 2026, for whether they were reasonable, program-related and properly recorded. The findings direct the district to correct any potential violations.

Newark Superintendent Roger León and his leadership team responded in a press release that the auditor found “nothing.” They titled the release, “Newark Public Schools Comes Through State Audit With Flying Colors.”

In their official response, which was included with the report, they said the auditor was “not authorized or qualified to second-guess” their education programs.

“To the extent that the report recommends that the district ensure that its activities are ‘aligned with the instructional program’ and that they ‘prioritize student needs,’” the district responded, “we respectfully submit that these recommendations are beyond the scope of the auditors’ authority and extremely presumptuous.”

The state auditor in an interview called the district’s response “an outlier,” saying that usually districts “address what their corrective action is going to be.”

This report has given critics more ammunition against a funding system that sends additional state aid to urban districts like Newark. But cutting that funding isn’t the only option here, O’Scanlon acknowledged, urging state Democrats to crack down on the district. He said the Sherrill administration could restore a state monitor.

It could also have the state Department of Education further audit Newark’s records. He even suggested that the administration consider taking control of the district again, “with competent people helping run it.”

But Sherrill’s office has not issued any response at all. The governor’s office instead referred NJ Spotlight to the state Department of Education, which declined to answer whether Newark has met the criteria for a state monitor or if it would intervene.

“The Department continues to exercise its oversight responsibility for all school districts consistent with state law,” read a brief statement.

By law, the state auditor also sends his report to key lawmakers, including leading Democrats like Senate President Nicholas Scutari and Assembly Speaker Craig Coughlin. But neither responded to requests for comment, nor did Senate Majority Leader Teresa Ruiz, a longtime Newark leader.

State Senate education committee chair Vin Gopal questioned some of the auditor’s findings.

Despite the potential historical savings cited from joining the school employees’ health plan, Gopal challenged the advice to enroll given its recent 34% premium hike.

He asked what drove the district’s high legal fees and whether special education was a factor. He defended $19 per person for board meeting catering as a “fair price” and pushed back on the auditor’s report that only seven people use the central office gym daily, noting the district says it has hundreds of members.

“There seems to be a lot more questions than answers and I hope that the Department of Education and the county superintendent will make sure the public has transparency and clear answers,” Gopal said.

Reached Monday, County Superintendent Joseph Zarra declined to comment.

The Education Law Center, the advocacy group that has led the state’s school equity battles, called on state authorities to intervene.

ELC executive director Robert Kim said his organization had not independently reviewed the audit’s findings and would not comment on its specific conclusions, but noted that the state’s duty goes beyond providing money to ensuring it is spent effectively.

“To the extent the audit identifies deficiencies in Newark’s spending practices,” he said, “we expect the state to ensure that those issues are addressed and that resources are directed where they are needed to provide Newark students with a thorough and efficient education.”

Newark’s former state-appointed superintendent, Christopher Cerf, also urged broader oversight. Because the auditor’s report intentionally limited its scope to offering recommendations to improve district operations, he noted, “a more comprehensive review would seem appropriate.”

The school board president, Hasani Council, did not respond to a request for comment on whether the board would require any corrective action.

Critics in Newark have called to focus spending on improving student outcomes, particularly for children struggling to read, rather than on things like central office perks.

Former school board candidate Ade Kelly cautioned against drastic funding cuts that could hurt students in Newark, but called for “more eyes” on the district to ensure those dollars benefit kids. The school board has failed to provide that supervision, he said.

“If the local folks aren’t doing this level of oversight,” he warned, “then we’re just asking for the state to come back in and try to take over the district.”

This story was originally published by NJ Spotlight News through the NJ News Wire.