An annual audit of the Montclair Public Schools presented Wednesday details 17 “recommendations” for corrective action — seven of them “material weaknesses” — including over-expenditures, a $450,131 shortfall in the food service fund and multiple issues paying the district’s bills.
The audit for 2024-25 comes with a new administration in place after Superintendent Ruth B. Turner and Interim School Business Administrator Dana Sullivan started with the district in July 2025 and as the district seeks $17.6 million from voters to plug a budget hole blamed on past administrators’ mismanagement.
The auditor David Gannon, of the firm PKF O’Connor Davies, also detailed areas where the district can focus a planned an forensic audit. Debt to an entity that provides transportation and special education services plays a key role in shortfall, Gannon said.
Essex Regional Debt
“One of the big drivers of the deficit this Essex Regional Educational Services Commission’s bills that have not been paid,” Gannon said. “That was a little bit of an unusual circumstance this year from the perspective of there were several districts in Essex County that fell into that bucket.”
Gannon did not say what other districts were impacted but said that Essex Regional faced cash flow issues, prompting the state Department of Education to intervene. The DOE called meetings of the various district’s auditors, he said.
“That did require us to restate the beginning balance of the financial statements to account for those bills,” he said. The bills dated to 2023 and 2024, Gannon said.
The public first learned of the district’s significant debts in March 2025 when Montclair Local reported that Essex Regional sought nearly $5.8 million from the district. Other vendors had also submitted bills that the district paid late or did not pay at all, the Local reported.
In the March 10 referendum, the district seeks $17.6 million from taxpayers that, if voters approve both questions, would raise taxes this year by 12%, adding $1,560.69 to the owner of an average home assessed at $639,630. This includes a one-time increase of 8.7% under the first question and a permanent 3.4% increase under the second question. If taxpayers do not approve this increase, the district faces $10.6 million in cuts to the 2026-27 budget, administrators have said.
Lapses in Oversight, Recordkeeping
Gannon issued a “qualified” opinion, which means certain aspects of the district’s financial statements were not accurate but those inaccuracies were not pervasive. His firm issued this opinion because the district had not maintained a detailed list of the property buildings and equipment it owns for several years, according to Gannon. The audit found that, as a result, the district was reporting the same financial decrease in value of $2.5 million each year without proof to back those numbers up.
In addition, Gannon said the district did not account for employees’ “compensated absence liability,” which is a calculation of how much money the district owes employees for unused leave time. When employees don’t use their leave time, districts often owe them a payout on their departure. However, the audit found the schools couldn’t show the records or the methods it used to calculate what it owes for those benefits.
The district’s former auditors had issued Montclair six of the same recommendations in previous years, a draft of the report shows. However, Gannon said the prior auditors did not elevate those issues to the level that his report is doing.
“Some of them were noted as findings in the prior auditors’ report, just not reported as a significant finding,” he said. Among other issues last year, the district did not properly monitor budgets, the district did not properly record receipts and revenues and did not communicate district wide standards for student activity funds, the schools’ former auditor Nisivoccia found.
The new auditors also found the schools assigned $950,000 for “future arbitrage liabilities” in 2024 – potential costs from financial deals that don’t pay off – based on calculations then-Business Administrator Christina Hunt made even though she did not “appear to have the qualifications necessary to perform the calculation.”
The audit also found the district made a purchase exceeding the statutory bid threshold without getting the required competitive quotes. The report does not say what this purchase was.
More of Audit’s Findings
Also among the findings in the audit for 2024-25:
- The district did not have a formal process for reconciling and reviewing account balances in a “comprehensive and timely manner” to ensure they were accurate.
- The district had “numerous deficiencies” in its accounts payables process, including duplicate purchase orders resulting in a $500,000 overstatement of expenditures and liabilities.
- The district overspent 35 budget line accounts in the general fund and three in the special revenue fund as of June 30, 2025. The general fund incurred a $13.64 million shortfall as of June 30, 2025. This forced the district to use monies from capital projects and debt service.
- The district’s food service fund lost $912,185 for 2024-25 and required $749,348 from the general fund. This resulted in a shortfall of $450,131 on June 30, 2025.
- The district did not accurately record pre-school related revenues and expenditures in the appropriate funds and accounts, leading to $944,862 that school officials had to reclassify.
- The district did not reconcile several bank accounts, including payroll, until several months after the year ended and it did not deposit cash receipts promptly.
- The district failed to maintain the required federal I-9 documentation confirming its employees are legally authorized to work in the United States.
The report also said the district has unexpended federal and state grant balances from prior years that it should return to the state Department of Education. And the district has $2.02 million in in New Jersey School Development Authority grant dollars from 2011 to 2017 that it has not collected, the report says.
Forensic Audit Focus
On questioning from the board, Gannon pointed out areas the district could focus on with a forensic audit. It’s something officials said the Montclair schools has planned $500,000 for in its 2026-27 budget.
“I would look at the debt service account,” Gannon said. “You had a referendum a few years ago. The tax levy wasn’t set at the level that was needed to pay the bonds off.”
He also pointed to issues in food service procurement.
“The handling of how those contracts were put into place with the food service management company, the contract, the provisions within and why they were unnecessarily agreed to.”
Can State Auditor Help?
Eric Kim, the parent of two children in the district, however, encouraged the district to look at the potential for the state Auditor to conduct an investigation of district finances, instead of paying a private firm.
Kim cited the state law, which outlines the scope of the state Auditor’s role. It says the office will conduct an audit of any school district that has a year end deficit and meets at least one of the additional criteria listed, including findings of “material weaknesses” of internal controls.
“I urge the district and the board leadership to contact the office of the state Auditor and begin the process of a state directed forensic audit, rather than taking the time and spending the money to conduct our own forensic audit,” Kim said.
These audits span typically multiple years as was the case in an audit of Perth Amboy Public Schools the state Auditor issued in December examining what contributed to a $13 million deficit in 2022.
Hunt, Montclair schools prior business administrator, has since left the district and secured a job in the Penns-Grove – Carnys Point school district in Salem County. She resigned as parents called for a forensic audit.
Hunt’s Parting Words
“I remain confident that the financial systems, oversight protocols, and transparency measures I helped strengthen will support the district in moving forward,” Hunt then told Montclair Local in a June 2025 statement.
Hunt has not answered Montclair Local’s multiple follow up requests for comment on the district’s financial issues.
Sullivan said the school board will formally accept the audit and approve a corrective action plan at its next meeting.
“Every one of these findings will have a corrective action plan that comes with it,” she said.
Reporter Asad Jung contributed to this article.
Email reporter Matt Kadosh at matt@montclairlocal.news
Prior Coverage
Read the full report: