NJ school audit finds millions in problems. District says it’s ‘nothing’
💰 Newark received $6.65 million in excess state aid after auditors found inaccurate enrollment reports.
🔎 The audit also found missed savings, questionable spending and gaps in employee background checks.
🏫 Newark officials said the district came through the 22-month review with “flying colors.”
NEWARK — New Jersey's largest school district got an extra $6.7 million in state aid while other districts closed schools due to reduced funding, according to a state audit that also found questionable spending and gaps in employee background checks.
State Auditor David Kaschak released the 36-page performance audit that examined Newark Public Schools from July 1, 2022, to May 31, 2026.
This school year, Newark Public Schools received $1.38 billion in state aid, more than 80% of its total budget. The district serves nearly 40,000 students at 65 separate schools. All other school districts in the state, which serve 1.4 million students, received $11 billion.
Newark got millions more in state aid than it should have
According to the audit, Newark schools received $6.65 million more in state aid than it should have. The extra funding came because the district overreported its enrollment by 128 students in two separate years.
Auditors also said the district could've saved $18.7 million in health premiums by enrolling in the State Health Benefits Plan; the district said its plan was more comprehensive and avoided the state plan's steep rate hikes.
The report also said that, "Certain matters were referred to the state’s Division of Criminal Justice."
No charges were announced, and the report didn't include any specific criminal accusations against individuals or the district.
$2.5M museum project remains unfinished
Another major focus of the report was the State Street School, which first opened in 1856 for Black children. Newark schools recently reacquired the property and, in May 2023, paid a contractor $2.5 million up front to convert the property into a museum and space for administrative offices. The completion deadline was May 2025, but it remains unfinished.
The audit also said general funds were not appropriately used for an employee gym and other non-classroom activities such as senior trips.
District says it came through audit with 'flying colors'
Newark school officials said the district came through the audit with "flying colors," claiming the report said the district's financial transactions were properly recorded and reasonable.
“The Newark Public Schools takes seriously every recommendation that can advance our progress and incorporates that feedback into meaningful, continuous improvement," Superintendent Roger León said.
However, the official 7-page Newark Public Schools response indicates that the district expressed disagreements with its findings. Newark schools officials previously asked auditors to remove "inaccuracies and misleading statements" from the audit report, and said that statements about referrals for criminal investigations were irresponsible.
Newark's funding draws scrutiny as other districts struggle
New Jersey Republicans expressed outrage at the findings and Newark's response, which claimed that the audit "found... nothing."
"Millions in excess aid, millions in missed savings and employees who never passed background checks, and Newark calls that nothing? If that's nothing, taxpayers should be terrified of what something looks like," Assemblyman Alex Sauickie, R-Ocean, said.
While Newark's coffers were flush, the Ocean Gate School District didn't open its doors this September for the first time in more than a century. It permanently closed after its funding was slashed by more than half: from $951,000 in 2019-2020 down to $346,000 in 2024-2025.
Several other districts had to sell school buildings, fire teachers, and cancel or charge for sports and extracurriculars while Newark's funding increased by $60.6 million in a single year.
"It’s disgusting. State taxpayers and children in Newark deserve better. Getting state taxpayer money back and fixing the school funding formula is way overdue," said Senator Declan O'Scanlon, R-Monmouth.
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