Assemblywoman Vicky Flynn (R-Holmdel) is calling for a state-appointed monitor to oversee Newark Public Schools after a state audit identified millions of dollars in potential savings and questioned district spending on catering, employee travel, construction projects, and student activities.
Sen. Declan O’Scanlon (R-Little Silver) is also demanding greater fiscal oversight, urging the state Local Finance Board to reject a proposed lease that he says would cost taxpayers nearly half a billion dollars for a single school building serving fewer than 700 students.
Their demands follow a performance audit by the Office of the State Auditor covering Newark’s non-payroll financial activities from July 1, 2022, through May 31, 2026. The audit identified $18.7 million in potential health insurance savings, $6.65 million in excess state aid resulting from overstated student enrollment, and numerous deficiencies in district spending and financial controls.
“I don’t know what is more alarming: the fact that a damning state audit of Newark schools is delivered to the governor and legislative leadership and they have yet to express any real concern; Newark’s head-scratching response; or the audit itself,” Flynn said.
The audit found that Newark could have saved an estimated $18.7 million during fiscal years 2024 and 2025 by participating in the New Jersey School Employees’ Health Benefits Program.
Instead, the district maintained a self-insured plan and failed to conduct a required 2025 review to determine whether other health insurance options would be more cost-effective.
Auditors also determined that Newark overstated its resident pupil enrollment by 128 students in both 2023 and 2024, resulting in $6,654,240 in excess state aid.
Other findings included $1.14 million in catering expenses, nearly $712,000 for senior day trips with no documented educational purpose, a $57,065 staff event that exceeded its approved budget, and approximately $566,000 spent on a gym in a leased administrative building without required formal school board approval.
The audit also questioned a museum project that remained unfinished more than a year after its contractual completion deadline. Newark had paid $2.5 million toward the project but could not provide adequate documentation of construction progress, expenses or a revised completion schedule. The district also lost an opportunity to receive a $750,000 preservation grant.
Flynn said the findings were particularly troubling as school districts elsewhere in New Jersey struggle with state aid reductions and rising costs.
“So many towns in Monmouth County have lost state aid and are dealing with the financial pressures associated with higher costs, and Newark seems to find very interesting ways to waste taxpayer dollars in amounts that would make a huge difference to our schools that are cutting teachers, staff, and programs just to balance their budgets,” Flynn said.
She also questioned the district’s academic performance given its spending.
“Newark spends more than a billion and a half dollars every school year and yet only a third of the district’s students are reading on grade level and less than a quarter are proficient in math. Meanwhile, administrators sign off on $700,000 worth of senior trips with no educational value, a $57,000 staff Fun Day, and $1.14 million in catering,” Flynn said.
“These are egregious errors in judgment by officials entrusted to educate Newark’s children, and it’s time they answer to a state-appointed monitor.”
Flynn said state law provides for the education commissioner to appoint a monitor when an independent auditor issues an adverse opinion on a school district. But the State Auditor’s report, however, was a performance audit and did not issue an adverse opinion on Newark’s financial statements.
Under Flynn’s proposal, a state monitor would oversee Newark’s finances, expenditures, facilities, and staffing while developing a corrective action plan. The monitor would remain until the education commissioner determines that the district has addressed its deficiencies.
“Every dollar wasted is a dollar taken away from this state’s students, including Newark’s. A state monitor needs to step in because all the children in New Jersey deserve an education system that puts their needs first, protects the resources intended for their education, and gives them every opportunity to succeed in life,” Flynn said.
O’Scanlon, meanwhile, has asked Local Finance Board Chairman Michael Rogers and other board members to reject Newark’s application for a long-term school-building lease that he said would cost nearly $500 million.
In a letter to the board, O’Scanlon argued that the proposed financial commitment should be evaluated against the district’s record of spending and the deficiencies identified by state auditors.
“The Newark School Board spent hundreds of thousands of dollars on exotic travel for themselves and administrators. They spent large sums on lawyers to fight public record requests. They approved large catering bills for themselves and others,” O’Scanlon wrote.
He said the expenditures “raised red flags about a Girls Gone Wild culture of abusing State taxpayer money.”
O’Scanlon also pointed to the audit’s findings involving health insurance costs, the unfinished museum, the administrative gym and senior trips without documented educational value. He noted that the State Auditor had referred certain matters to the state Division of Criminal Justice.
The audit provided additional details on several expenditures lawmakers questioned.
Of Newark’s $1.14 million in catering expenditures, auditors found that 136 transactions totaling approximately $184,000 lacked adequate documentation, while another 79 transactions totaling roughly $49,000 exceeded contractual or administrative meal-pricing limits.
The district also spent $711,943 on senior day trips during fiscal years 2023 through 2025. Auditors found no documentation of an educational component for entertainment activities, including carnival booths, rock-climbing walls, DJs, and karaoke.
A June 2024 staff event cost $57,065, exceeding its school board-approved spending limit of $44,000. The district also failed to publicly advertise for bids as required.
The state Department of Education directed Newark to refund $33,649.07 in disallowed state aid associated with the event’s first payment. Auditors recommended that the district also reimburse the state aid portion of a second payment, totaling $13,251.
The district spent approximately $566,000 to construct, equip, and operate the administrative gym, despite lacking required formal board approval and adequate supporting documentation. Sign-in records showed that an average of just seven employees used the facility daily, all of whom worked in the administrative building.
Auditors also found that Newark failed to collect $150,619 in required employee health benefits during unpaid leave while paying $41,602 in medical and prescription claims during those periods. The district had made no attempt to recover the outstanding contributions.
The audit identified deficiencies in employee background checks, finding that ten employees had not completed required criminal history screenings and another 199 had not properly updated their checks after receiving approval to work in other New Jersey school districts.
Newark subsequently took corrective action, including requiring affected employees to undergo screening or resubmit fingerprints.
Despite these deficiencies, the State Auditor concluded that the non-payroll financial transactions tested were properly recorded, generally related to district programs, and generally reasonable, while identifying multiple areas requiring management attention.
The report was a performance audit, not a financial audit, and did not express an opinion on the district’s financial statements. The auditor said the office had referred certain matters to the Division of Criminal Justice and would review Newark’s compliance with its recommendations in 2028.