Waste of the Day: NJ School Cut Audit Budget

Topline: The fox is guarding the henhouse at Montclair Public Schools in New Jersey.

A New Jersey school district cuts its oversight budget, knowing they have a problem

After the district’s annual audit uncovered seven “deficiencies” with its financial records, school officials slashed the budget for a follow-up investigation into “potential irregularities such as fraud, waste, and abuse,” according to Montclair Local.

Key facts: The annual audit found that the district overspent its budget by $13.6 million across 39 different spending categories last year. Auditors identified duplicate expenses, missing invoices, contradictory account balances in the school’s accounting records.

The audit suggested that some school employees could be unable to do their job properly. Auditors recommended the district ensure “staff are appropriately trained to utilize the financial software” that tracks spending. They also said payments due to the Internal Revenue Service were calculated “by the Business Administrator of the District at that time, who does not appear to have the qualifications necessary to perform the calculation.”

After the findings were released, the school board voted to reduce the budget for the next audit from $500,000 to $250,000. The school also plans to eliminate 32 teaching jobs to try and close its nearly $20 million budget deficit, caused by the $13.6 million in overspending, plus other revenue losses and increased expenses projected for next year.

Superintendent Ruth B. Turner argued the school would have had to lay off more staff if it did not reduce the audit price. However, the budgetary resources for some of Montclair’s staff never existed in the first place.

Restorative justice? WTF is that?

The district used one-time Covid-19 relief funds to hire staffers “to address social-emotional learning” and “restorative justice,” according to the Montclair Pod. Now that the relief funds have expired, there is no money for the increased payroll.

There were 330 people making six figures at Montclair last year, according to payroll records obtained by Open the Books. Two people made more than $200,000.

Search all federal, state and local salaries and vendor spending with the world’s largest government spending database at OpenTheBooks.com. 

Critical quote: Sheila Weinberg, CEO of the public finance watchdog group Truth in Accounting, told Montclair Local the issues facing the school district are “not common.”

The implications are serious. Spending beyond available resources increases the risk of financial instability, misallocation of funds and challenges in meeting future obligations.

Summary: New Jersey’s taxpayers deserve true financial oversight that cannot be handicapped by the officials being investigated.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com.

This article was originally published by RealClearInvestigations and made available via RealClearWire.