Assemblyman Alex Sauickie and Sen. Declan O’Scanlon are challenging a proposed 30-year school lease as state officials consider the agreement less than two weeks after auditors identified financial oversight failures and referred undisclosed matters to criminal investigators.

TRENTON, NJ — A proposed $498 million lease for a new Newark public school is facing renewed opposition from Republican lawmakers following a state audit that uncovered millions in potential savings, improper state aid payments and questionable administrative expenditures.

Assemblyman Alex Sauickie, R-Ocean, is calling on the New Jersey Department of Community Affairs to postpone consideration of the agreement, arguing that the state should not authorize another major financial commitment before addressing problems identified in the October 1 audit.

Sen. Declan O’Scanlon, R-Monmouth, separately urged the state’s Local Finance Board to deny the application.

The board’s published meeting schedule lists Wednesday, October 14, rather than October 15, for its October meeting. The proposed transaction involves a 30-year lease approved by the Newark Board of Education in March and subsequently submitted for state review.

State audit identifies millions in questionable spending

The New Jersey Office of the State Auditor examined Newark Public Schools’ financial operations from July 2022 through May 2026.

Its October 1 report identified several significant concerns, including:

• $18.7 million in potential health insurance savings over two fiscal years that the district did not realize.
• $6.65 million in excess state aid associated with overstated enrollment figures.
• $566,000 spent establishing and operating an administrative gym used by an average of seven people daily.
• Gaps in criminal background checks for district employees.
• Concerns involving legal expenditures, a delayed museum project and other non-classroom spending.

The auditors concluded that the financial transactions they tested were generally properly recorded and related to district programs, but identified numerous deficiencies requiring corrective action.

The report also confirmed that certain matters were referred to the New Jersey Division of Criminal Justice.

The auditor did not identify the specific matters referred or announce criminal charges.

Sauickie proposes new safeguards for school construction leases

Sauickie introduced two bills in May that would impose additional oversight on lengthy school construction and leasing agreements.

Assembly Bill A4985 would require voter approval or approval from a board of school estimate, as applicable, for school building leases exceeding 15 years.

Assembly Bill A5032 would require Schools Development Authority districts to solicit at least three competing proposals before entering developer agreements to construct and lease new schools.

Both measures were introduced months before the October audit. Neither is currently law.

“Taxpayers are being asked to fund massive long-term school development deals with little transparency, little competition and, in some cases, virtually no public input,” Sauickie said when announcing the legislation.

Newark school officials defend district finances

Newark Public Schools has disputed the characterization of its finances as broadly mismanaged.

In an October 1 statement, Superintendent Roger León said the district had cooperated with auditors throughout a 22-month review and emphasized their finding that tested expenditures were generally properly recorded and related to district programs.

The district has also pointed to overcrowding in Newark’s East Ward as a reason for developing additional school space.

The proposed lease would provide facilities for a new elementary school, although lawmakers have challenged the project’s long-term price and procurement process.

Nearly $500 million lease scheduled for state review Wednesday

The official Local Finance Board agenda confirms that Newark’s $498,397,000 proposed lease was scheduled for consideration at approximately 11:40 a.m. Wednesday, October 14, during the board’s virtual meeting.

That places the proposed review just 13 days after the October 1 state audit.

As of this report, the board’s final decision had not been verified. The published agenda establishes that the application was scheduled for consideration, not that it had been approved.

The decision could determine whether Newark moves forward with one of the state’s largest proposed school leasing commitments while questions about the district’s financial oversight remain unresolved.