A recent state audit revealed that a New Jersey school district utilized taxpayer funds for an unfinished museum and an underused employee gym. This audit, which also referred some issues to criminal authorities, highlighted the Newark Public Schools’ expenditure of around $566,000 on a gym located within its administrative building. Over a three-month review period in 2025, the facility was used by an average of just seven employees daily. This spending came at a time when the district was publicly stating its need for more funding, requesting an additional $60.6 million for its 2026 budget.
In a statement dated October 1, titled “Newark Public Schools Comes Through State Audit with Flying Colors,” the district claimed that state auditors found “nothing” amiss in their findings.
As New Jersey lawmakers discuss the distribution of billions in education funding, State Senator Declan O’Scanlon, a leading Republican figure in budgeting, expressed that the findings were “outrageous and distressing, but not at all surprising.”
The audit looked into the district’s finances from July 2022 to May 2026, uncovering that the gym was built without formal approval from the school board and bypassed the competitive bidding process. Additionally, a $280,440 management contract was approved, which employed a full-time trainer.
Another project came to light, causing concern over additional expenditures. The district made an upfront payment of $2.5 million to transform a historic school into a museum and offices; however, this project remained incomplete as of May 2026, well past its expected completion date.
Auditors mentioned that the district failed to provide satisfactory explanations for the lengthy delay or any documentation proving construction progress or expenses incurred.
While the New Jersey Auditor’s Office chose not to comment on the criminal referrals, neither the Department of Education nor the Newark Public School District addressed inquiries from the media.
Moreover, the audit indicated that Newark had exaggerated student enrollment figures by 128 students for the years 2023 and 2024. This miscalculation led to about $6.7 million in excess state educational aid for fiscal years 2024 and 2025.
It was also estimated that Newark could have saved $18.7 million in two fiscal years if it had participated in the state’s health benefits program rather than maintaining its current insurance plan.
The audit found that ten employees at Newark Public Schools had not undergone necessary criminal history background checks, while 199 others did not properly update their clearances after working in different districts, with some having hire dates stretching back 34 years.
Additionally, Newark spent around $1.14 million on catering through two-year contracts, with some transactions lacking the proper documentation or exceeding agreed pricing. They also spent $57,065 on a staff entertainment event for employees and their families, which was identified as an improper use of state funds.
The audit’s conclusions went beyond mere financial recommendations, as the State Auditor’s Office noted that “certain matters” were referred to the Division of Criminal Justice, though specific details regarding these expenditures were not disclosed, and no clear evidence of criminal misconduct was found.
According to state figures, Newark Public Schools was allocated approximately $1.3 billion in state education funding for fiscal year 2026, which constitutes about 10% of the total school aid across the state. O’Scanlon suggested that Newark’s portion of this funding should be decreased and redirected to districts that have seen budget cuts.
In defense, Newark officials dismissed claims of extensive wrongdoing, asserting that the transactions reviewed by auditors were reasonable, relevant to district programs, and properly logged.
