A New Jersey state audit is raising questions about how Newark Public Schools spent public money, including roughly $566,000 to build, equip and operate an employee fitness center at district headquarters.
Auditors said the gym’s construction lacked required board approval and bypassed competitive bidding rules. They also found that the facility averaged only about seven users per day, according to reporting on the audit.
The district strongly disputes the picture presented by the audit and says the fitness center is a legitimate employee wellness program that serves hundreds of members, offers cardio equipment, fitness classes and workshops, and is intended to improve staff health and retention.
District and Auditors Disagree Over How the Gym Was Funded
One of the central disputes is where the money came from.
Newark Public Schools says the fitness center was paid for through employee wellness funds. State auditors, however, said district records showed that the money came from the general fund.
The audit also questioned the procurement process, saying construction of the center did not receive required board approval and that competitive bidding requirements were circumvented.
The New York Post reported that the facility also employs a full-time personal trainer earning more than $80,000 annually.
Newark Says the Audit Shows Its Finances Are Strong
The district has taken a very different view of the overall audit.
In a statement titled “Newark Public Schools Comes Through State Audit with Flying Colors,” district officials said auditors spent 22 months reviewing records and that the audit confirmed financial transactions were properly recorded, related to district programs and reasonable.
Superintendent Roger León said the district takes recommendations seriously and described the audit as an exercise in transparency and due diligence.
The district also pointed to its annual independent audits, its high score in state fiscal-management reviews and its improved bond rating as evidence that its finances are being managed responsibly.
Audit Found Other Spending and Oversight Issues
The gym was only one part of the state review.
Auditors found that Newark received about $6.7 million in excess state aid after student enrollment was overstated by 128 students in submissions for 2023 and 2024. Newark disputes that conclusion and says its enrollment reporting followed state requirements.
The audit also questioned a $2.5 million upfront payment for a planned museum and office project at the former State Street School. By May 2026, auditors said the project was about a year behind schedule and that they had not received records documenting sufficient progress.
Newark responded that the project is intended to preserve an important site in the history of Black education and civil rights in New Jersey.
Auditors also identified issues involving legal expenses, preschool-provider payments, catering, senior trips and employee background checks. Ten employees had never completed required criminal background checks, while 199 did not have properly updated clearances, according to the audit. The district subsequently directed affected employees to complete or update those checks.
District Challenges Criminal Justice Referral
Perhaps the sharpest disagreement involves the audit’s statement that “certain matters” were referred to the New Jersey Division of Criminal Justice.
Auditors did not publicly identify those matters, saying more detail was withheld to protect any potential investigation.
Newark Public Schools called the reference to the criminal justice division “gratuitous and irresponsible,” arguing that the audit did not provide evidence explaining the referral.
Newark Says Student Outcomes Are Improving
The district argues that the controversy should also be viewed alongside recent improvements in Newark schools.
Officials point to rising graduation rates, reduced chronic absenteeism, enrollment growth and national recognition for several district programs. Newark Public Schools also says it has maintained strong independent financial ratings since returning to local control.
The state auditor, meanwhile, says it plans to return in 2028 to review how Newark has implemented the audit’s recommendations.
The dispute now centers on two very different interpretations of the same review: state auditors say they uncovered significant problems involving spending, oversight and recordkeeping, while Newark Public Schools says its overall financial system remains sound and that several of the audit’s conclusions are misleading or incorrect.
Sources: New Jersey Office of the State Auditor, Chalkbeat Newark, Newark Public Schools, New York Post
By NJ RADAR Team