Huge deficit didn’t stop Newark schools from spending big on travel, catering and restaurants

August 22, 2013

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Steve, Editor-in-chief of EAGnews, joined in 2009. Previously, he was a newspaper journalist.
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NEWARK, N.J. – One might expect a school district with a $75 million budget deficit to slash or eliminate spending for non-essentials like travel agency services, cell phones, catering services, restaurants and various forms of entertainment.

Where Your School Dollars GoBut that wasn’t the case in the Newark school district, which spent more than $800,000 on those five categories alone during the 2011-12 fiscal year. That total included $126,813 on travel agencies, $232,186 on 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.

Perhaps this type of spending shouldn’t be surprising from a district that struggles to keep track of its spending. The Newark district reported spending 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.

We wonder how many overdraft fees the district incurred over the course of the year.

The following sections offer more details of Newark school district spending in 2011-12. Note that this is not nearly all of the money spent by the district that year. We only investigated expenditures made through the district’s checking account.

We didn’t have the chance to track how the other $600 million was spent, but here’s a scary clue. We learned the district dropped about $102 million in 2011-12 on employee health insurance premiums, with no contribution from employees.

You can view a more thorough list of the district’s check registry by clicking here.

Travel and food expenses

Newark school employees obviously did their share of traveling in 2011-12, regardless of whether the district could really afford it. They apparently used a travel agency to make most of the arrangements.

Overall 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 apiece.

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?

Hotel and lodging costs for the district came to $35,483, with most of it spent on two charges – one at the Mountain Creek recreation lodge in Vernon, New Jersey ($15,664) and the other at the Robert Treat Hotel in Newark ($12,960). A statement from the district did not explain the reason for these expenses.

The district obviously hosted a lot of events that required refreshments, and officials clearly didn’t bother to ask volunteers to make sandwiches and potato salad. The district’s total catering bill came to $117,870, which included 81 separate charges with various businesses. One charge was for $25,343, another was for $25,132, and a total of 26 charges came to more than $1,000.

The district’s response to the catering bill was a bit sickening.

It said catering is required under the teachers union collective bargaining agreement for parent-teacher conferences, “because teachers are required to stay beyond the school day.” The district also said that catering “is also needed for Title I parent meetings and workshops, and within federal guidelines for Title I.”

The district had 140 charges at various restaurants for a total tab of $135,211. Many of the individual restaurant tabs were very large, including two apiece at Andros Diner ($3,000 and $4,023), Commerce Food Court ($2,199 and $2,188), EJ Café and Grill ($4,603 and $2,301) and El Meringue ($4,500 apiece).

Large single tabs included $2,765 at Just Fish, $2,517 at Luigi’s, $2,700 at Mario’s, $2,043 at Nicky’s Café and $3,378 at Red Line Grill.

The district offered no explanations for its restaurant bills.

Cell phones and entertainment

Many school officials these days seem to think that cell phones are absolutely necessary. As one clerical person at a large district once told us, “everyone who’s anyone has one.”

We’re guessing that’s the case in the Newark district, which spent $232,186 on cell phone bills in 2011-12.

It wasn’t so long ago that schools functioned every day without cell phones, because they didn’t exist.

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.

The district’s entertainment tab was also questionable, with 68 separate charges totaling $147,024.

Some of the more substantial charges were with Madison Square Garden ($11,460), the New York City Ballet ($11,980), the New Jersey Devils hockey club ($5,000), the New Jersey Nets basketball club ($4,410), the Newark Bears baseball club ($5,150), the New Jersey Jackals baseball club ($7,175), the Prudential Center ($9,040) and State Theater Group Sales ($7,200).

The district offered no explanation for the entertainment bills.

Taxpayers should also question the district’s moving and storage expenses, which came to $620,604. Perhaps the storage part is understandable, if the district really has that much stuff to store and limited space to keep it.

But we will never understand how an entity with thousands of employees should have to pay an extra dime to have most items moved. There must be hundreds of janitorial or maintenance workers who could be used for that function. We’re guessing the problem is that their union contracts won’t allow them to do that sort of work.

The district statement offered a partial explanation for this expense. It said that the $511,017 paid to Brantley Brothers (which was a big part of the $620,604) was necessary because “the district leases storage space from Brantley Brothers, and Brantley provides moving services when the district has to relocate schools to other buildings or within a building.”

Accountability, anyone?

Newark officials made several huge payments to outside organizations that definitely caught our attention.

Perhaps the most questionable was the $933,967 paid to a group called “Women in Support of the Million Man March.”

The district statement said “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.”

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 (see related story).

The Honorable Minister Louis Farrakhan, leader of the Nation of Islam, was recently in Newark to help raise funds for the WISOMMM’s legal defense fund. Farrakhan, whom many people do not consider so honorable, was a leading organizer of the 1995 Million Man March in Washington, D.C.

We were also curious about the district’s $755,019 payment to the Urban League and $278,800 payment to the National Urban Alliance.

The district statement offered no explanation for the Urban League expenditure. It did address the other expense, saying “payment to the National Urban Alliance is for professional development services provided over several years though grant monies.”

That tells us nothing at all.

A glance at Newark school spending from checking account, 2011-12

Travel agency – $126,813
Staff cell phones – $232,186
Catering services – $117,870
Restaurant tabs – $135,211
Moving and storage – $620,604
Energy and environmental consultants – $444,132
Various performing arts centers – $156,757
Various forms of entertainment – $147,024
Ethnic and community development centers – $2.1 million
Urban League – $755,019
Women in Support of the Million Man March – $933,967
National Urban Alliance – $278,800
Cable/Internet/telephone – $2.1 million
Christian camps – $88,472
Hotels/lodging – $35,438

Amount the district reported spending through checking account – $395 million
Amount actually spent – $409 million

Ashleigh Costello contributed to this report

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