Despite $75 Million Budget Deficit, Newark Spends on Non-Essentials

Despite a massive $75 million budget deficit, the Newark school district in New Jersey has not eliminated spending for non-essentials like travel agency services, cell phones, catering services, restaurants and various forms of entertainment, according to Steve Gunn and Ashleigh Costello of Education Action Group.

The school district spent more than $800,000 on travel agency services, cell phones, catering services, restaurants and entertainment during the 2011-12 fiscal year. The total amount included $126,813 on travel agencies, $232,186 for cell phones, $117,870 on catering services, $135,211 on restaurant tabs and $147,024 on entertainment.

Part of the catering bill was due to a teachers union requirement that catering be provided when teachers remain at school beyond regular hours for parent-teacher conferences. Questionable spending was evident in many other ways, as well, including $933,967 transferred to an organization known as the "Women in Support of the Million Man March." This group, which has ties to the controversial Minister Louis Farrakhan, is being sued by the federal government for alleged misuse of grant money and has filed for bankruptcy protection.

The school district reported that it spent a total of $395 million through its checking account in 2011-12. But "EAGnews learned it actually spent $409 million – a difference of $14 million."

The district spent $126,813 on travel agencies in 2011-12. There were four notable charges with the Essex Travel Agency, for totals of $16,996, $15,222 and two for $12,970 each.

The district issued a statement to EAGnews saying the use of travel agencies is "common practice to save money" because the agent can guarantee the best travel rates and book a trip without a purchase order. The state of New Jersey requires use of a travel agent, according to the district. That begs a simple question that taxpayers may want to ask – what was the travel for, and was it absolutely necessary, given the financial condition of the district?

Also, the Newark district spent $232,186 on cell phone bills in 2011-12. According to the district, there were a total of 440 cell phones issued to "executive staff, custodial workers, facility tradesmen and security" at the end of fiscal year 2012. The statement did not detail why these employees all need phones.

Newark officials made several huge payments to outside organizations that may raise eyebrows, such as a payment of $933,967 to a group called "Women in Support of the Million Man March." According to a district statement, WISOMMM is a local, non-profit community based organization that is licensed to provide educational services. Payment to WISOMMM is for the operation of early childhood programs that serve district residents.

The Education Action Group has called for greater transparency from Newark and to analyze more effectively its expenditures:

We hope the district demands accountability for the money it sends this group. Last year federal prosecutors sued Women in Support of the Million Man March, claiming the organization improperly spent $200,000 of a federal grant on "a number of unapproved items," and "wrote fictitious reports and proposals to cover it up," according to a report from the Courthouse News Service. WISOMMM has also filed for bankruptcy protection, according to the Wall Street Journal.

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