State Auditors Take Deep Dive Into Newark School Spending: Here's What They Found

NEWARK, NJ — A report from the state auditor’s office has raised some big questions about millions of dollars in spending throughout New Jersey’s largest public school district.

The Office of Legislative Services recently released the results of a performance audit that analyzed data from July 2022 to May 2026 in the Newark Public School District.

View the executive summary here, and see the full report here.

Researchers said the district’s non-payroll financial transactions were “generally related to the district’s programs and reasonable,” which was the main objective of the audit. They were also properly recorded in the accounting systems, the report said.

However, auditors also questioned several administrative decisions that were made over the past four years. They included:

• Health Benefits – “The district could have saved $18.7 million across fiscal years 2024 and 2025 by participating in the New Jersey School Employees’ Health Benefits Program.”
• Student Enrollment – “The district overstated enrollment in 2023 and 2024 by 128 students each year, resulting in $6.7 million of state aid overpayments to the district.”
• Stalled Museum Project – “The district has expended $2.5 million for a museum project that is past its completion deadline, shows little progress, and raises questions regarding fiscal efficiency and compliance with regulatory requirements. The district also lost the opportunity to obtain a $750,000 preservation grant.”
• Preschools – “The district could have saved approximately $1.3 million in preschool expenditures during school year 2023-2024 had it continued to make payment adjustments for average daily enrollment. Preschool expenditures, excluding charter schools, averaged $100.2 million in fiscal years 2023 through 2025.”
• Senior Day Trips – “The district spent $711,943 during fiscal years 2023 through 2025 on Senior Day trips that lacked educational components.”
• Gym Construction – “The district spent approximately $566,000 to construct, equip, and operate a gym in a leased administrative building without formal board approval for the associated construction costs.”
• Medical Claims – “The district did not collect required employee health benefits contributions totaling $150,619 and paid ineligible medical and prescription claims totaling $41,602 during periods of unpaid leave.”
• Background Checks – “The district did not ensure all employees completed the required criminal history background checks.”
• Catering – “The district’s catering expenditures lacked adequate documentation to demonstrate alignment with district goals and exceeded regulatory and contractual limits.”
• Lawyers – “The district’s total spending for legal services exceeded the statewide averages by $1.6 million per year, or 184 percent.”

A big chunk of the money that keeps the district afloat is coming from state taxpayers, the audit pointed out.

According to the district’s annual comprehensive financial reports, total non-payroll general fund expenditures – excluding charter schools – came to $518.7 million in 2023, $580.8 million in 2024, and $674.5 million in 2025. On average, 88 percent of the district’s general fund revenues were funded by state appropriations for those three fiscal years.

The report said that “certain matters were referred to the state’s Division of Criminal Justice,” but didn’t elaborate further.

NEWARK SCHOOL DISTRICT RESPONDS

Administrators in the Newark Public School District responded to the audit report, with Superintendent Roger León calling it an “exercise in due diligence and transparency.”

“No stone went unturned,” agreed the district’s longtime business administrator, Valerie Wilson.

“The state auditors went far beyond financial records,” Wilson continued. “We opened all our books, systems, and databases, and we answered all their questions. Newark Public Schools is the largest district in the state and, in accordance with the constitutional mandate to ensure a thorough and efficient education, we spend wisely and strategically, and this audit proves that.”

Newark school administrators said local enrollment continues to increase, pointing out that the district currently serves more than 44,000 students – more than 10 times the number of students in 85 percent of New Jersey’s school districts.

“With that size comes scrutiny, but never excuses or blame from us,” administrators said. “This is why the district already undergoes an annual independent audit and continues to receive an unmodified opinion, the highest possible rating. In fact, Newark public schools have received this high rating every year under local control, including the period reviewed by the state auditors.”

The Newark Public School District is judged by the same standards as all other New Jersey school districts – and “by all measures it stacks up,” administrators said:

“Newark Public Schools has been designated a high-performing school district by the New Jersey Department of Education, with a perfect score on the Quality Single Accountability System (QSAC) in fiscal management. The district’s bond rating was raised to an A- by the S&P Global Ratings agency, which reflects the strength of the district’s financial standing. And most recently, U.S. News & World Report ranked Newark’s high schools amongst the top in New Jersey with significant increases in national rankings. This state audit further confirms that Newark Public Schools is a district with high graduation rates, low chronic absenteeism, and its financial house is in order. The recently published Education Scorecard issued by the Center for Education Policy Research at Harvard University and the Educational Opportunity Project at Stanford University reports that Newark Public Schools ranks higher than 93% of all school districts nationwide in average learning rates achieved during the 2022-2025 school years.”

Board of Education president Hasani Council said that administrators “recognize the value of state oversight,” pointing out that Newark recently emerged from several decades of state financial control.

“We are proud of our results under local control and we will work tirelessly to continue to deliver excellence for our students,” Council said.

• Related: Newark Regains Control Of Schools After 22-Year State Takeover
• Related: Graduation Rates Up For Newark Public Schools, Absenteeism Down

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