Education

School District Says It Passed Audit With ‘Flying Colors.’ The Actual Report Tells A Different Story

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A New Jersey school district spent taxpayer money on an unfinished museum and a little-used employee gym, according to a state audit that also referred unspecified matters to criminal justice officials.

Newark Public Schools spent approximately $566,000 constructing, equipping and operating a gym inside its administrative headquarters, where an average of just seven employees used the facility daily during a roughly three-month review in 2025, according to an October 1 audit. The spending occurred as the district continued arguing it was chronically underfunded and seeking additional state aid, including a proposed $60.6 million increase in its 2026 budget.

In an Oct. 1 statement titled “Newark Public Schools Comes Through State Audit with Flying Colors,” the district declared that state auditors had “completed their review and found … nothing.”

The findings land as state lawmakers debate how billions in education funding is distributed across New Jersey.

State Sen. Declan O’Scanlon, the Senate’s top Republican budget officer, called the findings “outrageous and distressing, but not at all surprising,” according to Gothamist.

The gym was just one of several expenditures the New Jersey Office of the State Auditor examined. The probe looked at district finances between July 2022 and May 2026. Auditors found the facility was constructed without formal school board approval and that the district circumvented competitive bidding requirements. Newark also approved a $280,440 management contract that included a full-time trainer.

A separate project raised questions about how millions more were being spent. The district paid $2.5 million upfront to convert a historic school building into a museum and administrative offices, but the building remained unfinished as of May 2026, a year past its contractual deadline.

“The district was unable to provide us any viable explanation for the prolonged delay and has not provided supporting documentation to substantiate construction progress, expenses incurred, or an updated project timeline,” auditors wrote.

The New Jersey Auditor’s Office declined to comment on the criminal referrals. The New Jersey Department of Education and Newark Public School District did not respond to the Daily Caller News Foundation’s request for comment.

The district also overstated student enrollment by 128 students in both 2023 and 2024, resulting in approximately $6.7 million in excess state education aid for fiscal years 2024 and 2025, according to the audit.

Auditors further estimated Newark could have saved $18.7 million over two fiscal years by participating in New Jersey’s School Employees’ Health Benefits Program rather than maintaining its existing insurance arrangement.

Auditors also found that 10 Newark Public Schools employees had never undergone required criminal history background checks, while another 199 had failed to properly update their clearances after working in other New Jersey school districts, according to the audit.

“All 199 individuals were active employees with hire dates extending as far back as 34 years without having a properly updated criminal history background check,” auditors wrote.

Newark also spent approximately $1.14 million on catering under two-year contracts, with auditors identifying transactions that lacked adequate documentation or exceeded pricing limits. Another $57,065 went toward a staff entertainment event attended by employees and their children, which auditors found involved unallowable uses of state aid.

The findings went beyond recommendations for better financial management. The State Auditor’s Office disclosed that “certain matters” were referred to New Jersey’s Division of Criminal Justice, although the report did not identify the expenditures involved or establish that criminal wrongdoing occurred.

Newark Public Schools was allocated approximately $1.3 billion in state education funding for fiscal year 2026, roughly 10% of statewide school aid, according to state figures.

O’Scanlon argued that Newark’s share of state education funding should be reduced and redirected toward districts that have experienced funding cuts, according to Gothamist.

Newark officials rejected suggestions of widespread wrongdoing, emphasizing that auditors found the transactions they examined were generally reasonable, related to district programs and properly recorded.