A 5206 — Establishes additional procedures for financial oversight and reporting to ensure fiscal stability of school districts.

A5206 1R [First Reprint] ASSEMBLY, No.

Assemblywoman  ROSAURA "ROSY" BAGOLIE District 27 (Essex and Passaic) Assemblywoman  KATIE BRENNAN District 32 (Hudson) Assemblywoman  ANDREA KATZ District 8 (Atlantic and Burlington)    Co-Sponsored  by:   SYNOPSIS      Establishes additional procedures for financial oversight and reporting to ensure fiscal stability of school districts.

Assemblywoman Lopez, Assemblymen Calabrese and Simonsen   CURRENT  VERSION  OF  TEXTSYNOPSIS      AsEstablishes introduced.additional procedures for financial oversight and reporting to ensure fiscal stability of school districts.

  CURRENT VERSION OF TEXT      As reported by the Assembly Education Committee on September 14, 2026, with amendments.

     b.    The district’s school business administrator shall certify to the board of education, on1[on a monthly basis,basis] prior to each meeting of the board of education in which funds will be encumbered1, that:

     d.    The commissioner shall establish standardized procedures for the monthly1[monthly]1 reconciliation required pursuant to subsection a.

     b.    A board of education shall not approve any financial commitment unless the school business administrator certifies 1prior to the meeting of the board that the funds for the financial commitment will be encumbered1 that:

       6.

       8.    (New section) Notwithstanding1a. 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.

 (1)     Notwithstanding 9.   any Thisother actlaw, shallrule takeor effectregulation into the firstcontrary, fullthe schoolpurchasing yearagent followingshall, prior to the dateawarding or approval of enactment.a purchase, contract, or agreement by the board of education at a meeting of the board, certify that the board has, to that point, acted in accordance with the provisions of the “Public School Contracts Law,” N.J.S.18A:18A-1 et seq.

       (2) STATEMENTIf  the     purchasing Thisagent billdetermines establishesthat proceduresthe toboard behas followednot byacted chiefin schoolaccordance administrators,with schoolthe businessprovisions administrators, boards of education,the and“Public schoolSchool employeesContracts inLaw,” orderN.J.S.18A:18A-1 toet improveseq., the financialpurchasing managementagent ofshall schoolreport districtsthat andfinding ensureto the short-Office andof long-termControversies fiscaland stabilityDisputes ofwithin the district.Department of Education.

     Under(3) currentNotwithstanding law,any theother secretarylaw, ofrule, aor boardregulation of education makes a monthly report to the boardcontrary, that includes information on the monthlyOffice reconciliation of districtControversies bankand accountDisputes statementsshall thatdetermine, haswithin been30 conducteddays byof the district’spurchasing chiefagent’s schoolreport, administrator. if Thisthe billboard specifiesacted additional information to be included in theaccordance secretary’swith monthly report to provide the boardprovisions with a more complete picture of the district’s“Public fiscalSchool situation. Contracts SomeLaw,” ofN.J.S.18A:18A-1 theet additionalseq. required information includes:

     (1)(4) projectedNotwithstanding year-endany surplusother law, rule, or deficit;regulation to the contrary, if the Office of Controversies and Disputes determines the board has not acted in accordance with the appropriate procedures, the purchase, contract, or agreement shall not be approved or awarded by the board of education.

     (2)b. identification of any structural operating deficits;

    (1)1 (3)Notwithstanding anany analysisother oflaw, budgetrule, or regulation to actualthe expenditures;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.

and      (4)1(2)  Notwithstanding any multi-yearother contractuallaw, commitments,rule, includingor salaryregulation andto benefitthe obligations.contrary, 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.

Thesepursuant items and the other information required under the bill to besubsection includeda. 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 bankthis accountsection, statements required under existing law, the billpurchasing requiresagent ashall district’simmediately chiefprovide schoolwritten administratornotice to perform a monthly reconciliation of the district’ssuperintendent position control roster, which is currently required to be maintained by a school district under State Board of Education regulations, and the district’sboard 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-approvededucation. 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,(3)  theNotwithstanding billany requiresother certainlaw, informationrule, toor beregulation conveyed to athe boardcontrary, the implementation of educationthe whenpurchase, schoolcontract, staffor recommendationsagreement requirethat athe votepurchasing ofagent determines was not properly awarded or approved by the board pursuantin toaccordance currentwith law.the "Public School Contracts Law," N.J.S.18A:18A-1 et seq.

    pursuant 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 fundsubsection thea. 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.

    of Thethis billsection establishesshall proceduresremain tosuspended bepending followedfurther byreview theof school business administrator if the administratorOffice isof notControversies able to certify the financial commitment, and ultimatelyDisputes provideswithin for reporting to the CommissionerDepartment of EducationEducation. if the board takes action in contravention to the school business administrator’s objection to certification.

     The billOffice directs each school district to adopt a policy regarding the reporting of fiscalControversies 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 anyDisputes actionshall taken. determine 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."Law," N.J.S.18A:18A-1 et seq.

and shall provide written notice to the board of the office’s determination.1        9.    This act shall take effect in the first full school year following the date of enactment.