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N.J. Withholds $30 Million in U.S. Aid From Newark

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In the latest skirmish between the New Jersey education department and Newark school officials, the state has withheld $30 million in federal aid from the district.

Last week the district submitted to Trenton its response to the impasse over Chapter 1, which funds compensatory-education programs for disadvantaged children.

The dispute over the funds is but the latest clash between state and district officials since Commissioner of Education Mary Lee Fitzgerald last spring announced the state's intention to take the final step in the lengthy procedure leading to seizure of districts under the state's path-breaking takeover law.

In addition to last week's submission, Toni Randolph, a spokeswoman for the Newark school board, said the district would provide further Chapter 1 documentation to the state if requested.

But Ms. Randolph also expressed concern about the state's action in withholding the money.

"We're afraid that the children will be the ones hurt in the end,'' she said. "This action didn't have to be taken. We could have continued negotiations instead.''

State officials said last week they would have no response to the submission for the time being.

Newark officials have "a whole list of things they have to satisfy for the Chapter 1 funds to be released,'' said Faith Sarafin, a spokeswoman for the education department.

Administrative Costs Cited

State officials said they took the action because of steep administrative expenses associated with the Chapter 1 program in Newark.

In an external review of the district issued in May, a state review team noted that the district budgeted Chapter 1 funds for a director, four assistant directors, five budget examiners, 10 supervisors, nine curriculum specialists, one management specialist, and 70 project coordinators, at a total cost of $6.6 million.

According to the review team, Newark's administrative budget represented 17.9 percent of the district's Chapter 1 allocation, compared with 5.6 percent for administrative costs in Camden, 3 percent in Jersey City, and 1.8 percent in Paterson--other poor, urban districts.

District officials disagreed with the finding, citing primarily the project coordinators, who, they said, were not supervisors but school-based instructional leaders and support staff.

By removing them from the calculations, the district figured that it spent $1.9 million, or 5 percent, on administrative positions for Chapter 1.

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