State Audits Find New Budget Shortfalls in Newark

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Auditors reviewing the state-run Newark, N.J., schools have uncovered more unpaid bills and debt in the troubled district, bringing the total red ink to about $70 million in the system—$12 million above a shortfall that was reported in February.

With six different outside audits going on simultaneously in the 44,000-student district, state officials admit that the amount could go up even higher. ("Red Ink in Newark Mars State Takeover," Feb. 2, 2000.)

"It's true. As long as we have auditors in there, it could change depending on what they find," said Robert A. DeSando, a spokesman for David C. Hespe, New Jersey's commissioner of education. "We are talking about millions of dollars of unpaid bills."

To date, no evidence of criminal wrongdoing has been found, he added. Under state law, investigators would have to prove that school officials knowingly spent money they didn't have in order to establish that a crime had been committed.

"It appears all monies have been spent on programs and services," Mr. DeSando said. "Absent the proper budget and accounting procedures, it is uncertain whether people knew they were spending money they didn't have."

Looking Ahead

A full, final accounting of the problems is several months away, he said. The troubles go back to 1995, when Newark became the third New Jersey district, after Jersey City and Paterson, to fall under state control.

Meanwhile, local and state administrators are trying to fill in the fiscal gaps for this year, while simultaneously planning a budget for the 2000-01 school year.

Marion A. Bolden, the state-appointed superintendent of the Newark schools, said the district so far has been spared major cutbacks, thanks to emergency measures and promises of help from state leaders.

Ms. Bolden, who took over as the Newark schools chief last summer, admitted to being frustrated by the current situation. "It's very distracting," she said. "I took the position because I know we can make a difference on the academic side, but that's not where I spent most of my energies this year."

Vol. 19, Issue 33, Page 3

Published in Print: April 26, 2000, as State Audits Find New Budget Shortfalls in Newark
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