Bill Text: NJ A5206 | 2026-2027 | Regular Session | Introduced
Bill Title: Establishes additional procedures for financial oversight and reporting to ensure fiscal stability of school districts.
Sponsorship: Partisan Bill (Democrat 1)
Status: (Introduced) 2026-06-04 - Introduced, Referred to Assembly Education Committee [A5206 Detail]
Download: New_Jersey-2026-A5206-Introduced.html
Sponsored by:
Assemblywoman ROSAURA "ROSY" BAGOLIE
District 27 (Essex and Passaic)
SYNOPSIS
Establishes additional procedures for financial oversight and reporting to ensure fiscal stability of school districts.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning school district financial procedures, amending N.J.S.18A:17-9, and supplementing N.J.S.18A:18A-1 et seq. and chapters 6, 11, and 17 of Title 18A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. N.J.S.18A:17-9 is amended to read as follows:
18A:17-9. a. The chief school administrator, or board designee other than the secretary, shall prepare the monthly reconciliation of bank account statements and, in conjunction with the secretary, take any steps necessary to bring the cash record balance and reconciled bank balance into agreement prior to completion of the secretary's monthly report.
b. The secretary's monthly report shall be provided to the board of education in a format to be established by the Commissioner of Education and include:
(1) the amount of total appropriations and the cash receipts for each account;
(2) the amount for which warrants have been drawn against each account;
(3) the amounts of orders or contractual obligations incurred and chargeable against each account year to date and since the date of the last report;
(4) the cash and appropriation balances for each account and fund;
(5) the reconciled bank account balances;
(6) the projected year-end surplus or deficit;
(7) identification of any structural operating deficits;
(8) current and projected fund balance levels;
(9) analysis of budget-to-actual expenditures;
(10) any multi-year contractual commitments, including salary and benefit obligations;
(11) the results of the monthly reconciliation of the school district's position control roster and payroll and human resource staffing records required pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill); and
(12) financial certifications and objections made by the school business administrator pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill).
c. The district's school business administrator shall certify the monthly report is accurate, financial obligations of the district have been disclosed, and projections are based on available data.
d. The secretary shall:
[a.] (1) [Report] provide testimony to the board, at each regular meeting, but not more often than once each month, [the amount of total appropriations and the cash receipts for each account, the amount for which warrants have been drawn against each account, the amounts of orders or contractual obligations incurred and chargeable against each account year to date and since the date of his last report, the cash and appropriation balances for each account and fund, and the reconciled bank account balances in the manner and form prescribed by the commissioner] summarizing the monthly report, clarifying the financial conditions of the district, identifying any fiscal concerns, and recommending corrective action, if appropriate;
[b.] (2) [Keep] keep and maintain [in his office] all contracts, records and documents belonging to the board in the secretary's office, except [such as shall] those that are required to be kept by the treasurer of school moneys pursuant to law, under [such] any conditions as the board shall prescribe; and
[c.] (3) [Perform] perform any other duties prescribed by law.
(cf: P.L.2010, c.39, s.11)
2. (New section) a. In addition to the monthly reconciliation of bank account statements required pursuant to N.J.S.18A:17-9, the chief school administrator, or board designee other than the secretary, shall perform a monthly reconciliation of the school district's position control roster, as maintained pursuant to regulations of the State Board of Education, and the district's payroll and human resources staffing records. The chief school administrator or board designee shall verify that all payroll expenditures are aligned with the number of board-approved positions and available school district budget appropriations.
b. The district's school business administrator shall certify to the board of education, on a monthly basis, that:
(1) the reconciliation required pursuant to subsection a. of this section has been completed;
(2) any discrepancies between the position control roster and payroll and human resources records have been identified and addressed; and
(3) payroll expenditures are consistent with approved staffing and budget appropriations.
c. In the event that the school business administrator determines that all discrepancies have not been identified and addressed, the school business administrator shall document the discrepancies in writing. The written report on the discrepancies shall be presented to the chief school administrator and the board of education. If the discrepancies are not resolved within a time period as may be established by the Commissioner of Education, the commissioner shall require the school district to take corrective action or the commissioner may impose additional oversight on the district as deemed appropriate.
d. The commissioner shall establish standardized procedures for the monthly reconciliation required pursuant to subsection a. of this section and the reporting requirements established pursuant to subsection c. of this section. The procedures shall ensure compatibility with existing school district payroll and human resources systems and allow for the phased implementation of the requirements of this section for school districts that require system upgrades.
e. The commissioner shall provide school districts with any guidance and technical assistance that may be necessary to implement the provisions of this section.
3. (New section) School staff appointment recommendations made to the local board of education that require a vote of the board pursuant to law shall include, as applicable:
a. the position control roster number of the individual being hired and the position control roster number of the individual being replaced;
b. the hired employee's name, position, department, school location, salary or hourly rate, and applicable step in the appropriate salary guide;
c. the account to which the hired employee's pay will be charged; and
d. information on whether the new hire is replacing a position, filling a vacant position, or filling a new position.
4. (New section) a. As used in this section, "financial commitment" means the hiring of school district personnel, the award of salary adjustments and stipends, the approval of collective bargaining agreements and amendments thereto, vendor contracts, and professional services agreements, and any action resulting in a financial obligation that extends beyond the current school budget year.
b. A board of education shall not approve any financial commitment unless the school business administrator certifies that:
(1) sufficient funds are available in the current school budget year to fund the financial commitment; and
(2) the financial commitment is consistent with the school district's financial plan.
c. If the school business administrator is not able to certify the financial commitment, the school business administrator shall issue a written objection that indicates either that sufficient appropriations are not available in the current school budget year to fund the commitment or the commitment may create or contribute to a structural deficit of the school district's budget. The written objection shall be presented to the chief school administrator and the board of education. The board shall acknowledge the receipt of the written objection in the board minutes.
Any action taken by the board of education in contravention of the written objection shall be approved by the adoption of a board resolution that includes a statement acknowledging the fiscal risk, and identifying how the board intends to address the fiscal impact.
d. If a board takes action to override the financial objection of the school business administrator, the action shall be reported to the executive county superintendent of schools who shall forward information on the action of the board to the Commissioner of Education. The commissioner shall review the action of the board and if deemed necessary may require corrective action.
e. Information on the financial certifications and objections made by the school business administrator shall be included in the school district's monthly financial reports, and the annual audit of the school district required pursuant to N.J.S.18A:23-1 and any other required audits.
f. The commissioner shall:
(1) develop standardized certification and objection forms to be used by school districts;
(2) ensure that certification and objection procedures are aligned with existing school budget and procurement procedures and ensure timely certification without delaying school district operations; and
(3) provide training to school business administrators and members of boards of education on compliance with the provisions of this section.
5. (New section) a. The Commissioner of Education shall, in consultation with interested stakeholders in the education community, establish a training program on the creation and interpretation of the monthly reports required pursuant to N.J.S.18A:17-9, school budgeting, governmental accounting, financial commitments, and any other fiscal responsibility requirement the commissioner deems necessary. The training shall be provided to school business administrators, board of education members, and any individual serving as the secretary of a board of education.
b. The Department of Education may enter into an agreement with one or more private or non-profit entities to make a training program available, free of charge, to persons subject to the requirements of subsection a. of this section.
6. (New section) a. A board of education shall adopt a policy establishing a procedure regarding the reporting of fiscal concerns in the district.
b. The board shall have control over the policy, except that the policy shall, at a minimum:
(1) include a definition of fiscal concern, that at a minimum includes violations of financial policies of internal controls; discrepancies in financial records or reporting; unrecorded liabilities or financial obligations; actions that may result in a structural deficit; or the misuse or misallocation of district funds;
(2) provide for the creation of a reporting form, based on the model reporting form developed by the Commissioner of Education pursuant to subsection c. of this section, that shall be submitted by a school employee to the school business administrator or the chief school administrator to initiate a review of an alleged fiscal concern. The reporting form shall require the school employee to provide, in writing, an explanation of the alleged violation;
(3) require the school business administrator or chief school administrator to review the reporting form and, within a timeframe established by the commissioner, document in writing the results of any investigation that was conducted into the alleged fiscal concern and whether any action was taken;
(4) permit a school employee to submit a written complaint of the alleged fiscal concern directly to the executive county superintendent and the commissioner if the alleged fiscal concern was not resolved by the school business administrator or the chief school administrator within a timeframe established by the commissioner; and
(5) safeguard confidentiality in the reporting of the alleged fiscal concern and protect school employees from retaliatory action in accordance with the provisions of the "Conscientious Employee Protection Act," P.L.1986, c.105 (C.34:19-1 et seq.).
c. To assist boards of education in developing a policy on the reporting of fiscal concerns in the district, the commissioner shall develop a model policy and model complaint form. The model policy and model complaint form shall be updated as the commissioner deems necessary.
d. A school district shall provide annual training to school employees on the school district's policy on the reporting of fiscal concerns. A school district shall require a school employee to certify, at the completion of the training, that the employee attended the training and has been informed of the district's procedures and the employee's reporting rights.
7. (New section) The Commissioner of Education shall review a school employee's written complaint regarding fiscal concerns in a school district submitted pursuant subsection b. of section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill). The commissioner may require corrective action of the school district, if deemed appropriate.
8. (New section) Notwithstanding any other law, rule, or regulation to the contrary, the purchasing agent shall have the authority to override any purchase, contract, or agreement approved or awarded by the board of education if the purchasing agent determines that the purchase, contract, or agreement was not properly awarded or approved by the board in accordance with the "Public School Contracts Law," N.J.S.18A:18A-1 et seq.
9. This act shall take effect in the first full school year following the date of enactment.
STATEMENT
This bill establishes procedures to be followed by chief school administrators, school business administrators, boards of education, and school employees in order to improve the financial management of school districts and ensure the short- and long-term fiscal stability of the district.
Under current law, the secretary of a board of education makes a monthly report to the board that includes information on the monthly reconciliation of district bank account statements that has been conducted by the district's chief school administrator. This bill specifies additional information to be included in the secretary's monthly report to provide the board with a more complete picture of the district's fiscal situation. Some of the additional required information includes:
(1) projected year-end surplus or deficit;
(2) identification of any structural operating deficits;
(3) an analysis of budget to actual expenditures; and
(4) any multi-year contractual commitments, including salary and benefit obligations.
These items and the other information required under the bill to be included in the monthly report will allow the board to make more informed decisions over the course of the school year.
In addition to the monthly reconciliation of bank account statements required under existing law, the bill requires a district's chief school administrator to perform a monthly reconciliation of the district's position control roster, which is currently required to be maintained by a school district under State Board of Education regulations, and the district's payroll and human resources staffing records. The chief school administrator is required to verify that all payroll expenditures are aligned with the number of board-approved positions, and the results of this reconciliation will be included in the secretary's monthly report. The bill requires the school business administrator to certify to the board on a monthly basis that the reconciliation has been completed and that any discrepancies between the position control roster and payment and human resources records have been identified and addressed. The bill establishes procedures to be followed in the event that the school business administrator finds any discrepancies between the position control roster and payroll and human resources staffing records.
Additionally, the bill requires certain information to be conveyed to a board of education when school staff recommendations require a vote of the board pursuant to current law.
The bill also provides that a board of education may not approve any financial commitment unless the school business administrator certifies that sufficient funds are available in the current school budget year to fund the financial commitment, and the financial commitment is consistent with the district's financial plan. The bill defines a "financial commitment" as the hiring of school district personnel, the award of salary adjustments and stipends, the approval of collective bargaining agreements and amendments to those agreements, vendor contracts, professional services agreements, and any action resulting in a financial obligation that extends beyond the current school budget year.
The bill establishes procedures to be followed by the school business administrator if the administrator is not able to certify the financial commitment, and ultimately provides for reporting to the Commissioner of Education if the board takes action in contravention to the school business administrator's objection to certification.
The bill directs each school district to adopt a policy regarding the reporting of fiscal concerns in the district. At a minimum the policy is required to include a definition of fiscal concerns as detailed in the bill. The policy would provide for the creation of a reporting form based on a model reporting form to be developed by the commissioner. A school employee will use the reporting form to provide, in writing, an explanation of the alleged violation. The report will be reviewed by the school business administrator or chief school administrator who will document in writing the results of the investigation and any action taken. The bill permits a school employee to submit a written complaint of the alleged fiscal concern directly to the executive county superintendent of schools and the commissioner if the alleged concern was not resolved within a timeframe established by the commissioner. The bill requires the policy to safeguard confidentiality and protect school employees from retaliation in accordance with the provisions of the "Conscientious Employee Protection Act."
Finally, this bill grants the purchasing agent the authority to override any purchase, contract, or agreement approved or awarded by the board of education if the purchasing agent determines that the purchase, contract, or agreement was not properly awarded or approved by the board in accordance with the "Public School Contracts Law."
