NEWARK, March 14 — In this city's Ironbound section, the principal of the Hawkins Street School keeps in his office an artist's rendering of an annex that was supposed to be added years ago. It is a reminder to him every day of the possibilities for space and technology that have been denied to the 575 students in the elementary school.
"The beef," said the principal, Joseph Rendeiro, "is that we have a school that is 100 years old and trying to meet the needs of the 21st century. It's been a challenge."
Over the past four months, an increasingly disturbing picture has emerged, showing opportunities and dollars frittered away by the New Jersey Schools Construction Corporation while thousands of students, like those at the Hawkins Street School, try to learn in outdated or overcrowded schools.
The agency, created to build schools primarily in the state's poorest districts, has already spent $3.1 billion in those districts, where it built 31 schools. Last summer, the corporation said its $8.6 billion construction budget, which included more than $2 billion for suburban schools, would cover only half the projects it had expected.
But even more disturbing to school and elected officials, as well as taxpayers, are some of the reasons the agency has fallen short.
On Wednesday, Gov. Jon S. Corzine is expected to propose changes to the Schools Construction Corporation, when he releases a report from a committee he appointed to study its problems.
The committee, it seems, had its work cut out for it. Recent reports by the state auditor and the inspector general found lax fiscal oversight at the agency and fiascos in school construction: a partly built school now scheduled for demolition on a contaminated site in Trenton; a planned school just yards from a theater that had featured pornographic films in Passaic; and property in Union City, intended for a school, which quadrupled in price after an apartment building rose on it.
A report by the state auditor released last week found that even basic safeguards of the public's money were not maintained, with the agency relying heavily on private contractors to manage projects. In those firms, the report found, "direct salaries were marked up by 94 to 192 percent for the cost of employee benefits, indirect costs and profit."
The report, which covered the period since April 2005, also noted that in two cases, construction managers were paid 40 percent of their construction supervision fees before construction contracts were awarded. It also found that 60 change orders, totaling $45 million, were allowed, using questionable interpretations.
Its recommendations sounded more like steps one might take to establish a construction agency, rather than to reform one, and include items that might have been obvious to a first-year accounting student, like creating a strategic plan; paying for work after it is completed, not before; keeping track of checks; and actually cashing them.
Land acquisition for a school should come before architectural drawings, it noted: "It would be more prudent to decide what and where to build before it is designed."
But it is hardly the only document critical of the agency. In a Jan. 12 report, the Office of the Inspector General cited a case in which a vendor may have been paid up to $3.4 million more than the fee approved by the agency's board.
The inspector also found that school construction employees had created false documents indicating that board approval was not required for the fees stipulated, and that the employees had also expedited a bill from the management firm for $1.6 million by breaking it into four invoices, for which no documentation was provided.
Neither the auditor's office nor the inspector general's office would release the names of specific vendors or projects, saying the investigations were continuing.
Assemblyman William D. Payne, who represents most of Newark and all of Hillside, called it criminal that the state could not yet provide adequate educational facilities for poor children almost 40 years after the beginning of the Abbott v. Burke case, a state Supreme Court decision that ordered the state to increase financing for urban districts to bring them up to a par with suburban districts.
"Money was wasted because of a lack of proper management and tremendous inefficiencies, and there was no oversight," he said, adding that management costs for schools in Abbott districts under the construction corporation were 45 percent higher than in other districts.
"They went into the candy jar and took out as much as they could," he said.
The Schools Construction Corporation was created in 2002 by Gov. James E. McGreevey after the state Supreme Court ruled in 1998 that school facilities in poor districts should be comparable to those in rich districts. But in March 2005, the inspector general recommended that the agency stop spending money until it adopted internal reforms, saying it was "vulnerable to mismanagement, fiscal malfeasance, conflicts of interest and waste, fraud and abuse of taxpayer dollars." In July, the agency announced that it was running out of money after building just an eighth of the schools on its list.
Scott A. Weiner, the governor's special counsel for school construction, who on Monday took over as the transitional chief executive of the corporation — its fourth leader in five years — said the agency had built "a very credibly reliable system of financial management and control" since last summer, when Gov. Richard J. Codey turned his attention to problems in the agency.
The report being released by Governor Corzine on Wednesday is expected to include recommendations to tighten the controls further, and possibly to reorganize the Schools Construction Corporation, perhaps within another state agency.
But for Dr. Robert Holster, superintendent of the Passaic public schools, who is waiting for four schools to be built, the clock is ticking. Fewer than half of his elementary schools have libraries, he said, and few have labs.
"We've got to be on the same playing field as every other child," Dr. Holster said.
