A 5207 — Expands duties of executive county business official; establishes processes for fiscal review of school districts by executive county superintendent and Commissioner of Education.

A5207 1R [First Reprint] ASSEMBLY, No.

Assemblyman MillerMiller, Assemblywoman Lopez, Assemblymen Angelozzi and Simonsen         SYNOPSIS      Expands duties of executive county business official;

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

Each quarterly1[quarterly]1 fiscal review shall include,include 1an analysis of the two most recent audits conducted pursuant to N.J.S.18A:23-1 and may consider additional factors including1, but not be limited to:

     b.  A school district shall provide the executive county business official with any information necessary to conduct each quarterly1[quarterly]1 fiscal review.

       4.    (New section) a.  The Commissioner of Education 1, in consultation with the State Comptroller,1 shall develop and administer a Comprehensive Statewide Fiscal Early Warning System.  The system shall utilize fiscal information reported by school districts throughout the fiscal year to enable timely and structured intervention of districts that are at risk of financial distress.

     c.  To monitor a school district’s fiscal risk indicators, the commissioner shall utilize school district audits conducted pursuant to N.J.S.18A:23-1, comprehensive reviews conducted under the New Jersey Quality Single Accountability Continuum pursuant to section 11 of P.L.1975, c.212 (C.18A:7A-11), quarterly1[quarterly]1 fiscal reviews conducted by the executive county business official pursuant to section 2 of P.L.    , c.    (C.       ) (pending before the Legislature at this bill), and any additional information the commissioner deems necessary from a school district.

       5.    (New section) a.  The Comprehensive Statewide Fiscal Early Warning System established pursuant to section 4 of P.L.    , c.    (C.      ) (pending before the Legislature as this bill) shall establish a fiscal categorization system whereby each school district is annually categorized as being at low, moderate, or high fiscal risk pursuant to fiscal standards developed by the Commissioner of Education.Education 1, in consultation with the State Comptroller1.

     c. c. If a district is categorized as being at moderate or high fiscal risk, the commissioner shall require the district to develop an improvement plan to address the fiscal concerns identified by the commissioner.

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     d.  The(1) commissionerIf shalla reviewdistrict theis district'scategorized progressas inbeing implementingat themoderate improvementor planhigh notfiscal lessrisk, than once every six months.  If the commissionerboard finds,of basededucation onshall thosediscuss reviews, that after two years the district’sdetermination fiscalat conditiona haspublic notmeeting substantiallyof improved in accordance with regulations established by the commissionerboard pursuant to section 6 of P.L.  education ,no c.   later (C.       than )30 (pendingdays beforeafter thereceiving Legislature as this bill), the commissionernotice mayprovided requirepursuant the district to amendsubsection theb. improvement plan.

of this section.

     (2)1 If a district is categorized as being at moderate or high fiscal risk, the commissioner shall require the district to develop an improvement plan to address the fiscal concerns identified by the commissioner.

1The board of education shall adopt a resolution approving the improvement plan within 30 days of discussing the determination at a public meeting of the board of education as required pursuant to paragraph (1) of this subsection.1 The improvement plan shall be submitted to and approved by the commissioner.  In accordance with the improvement plan, the commissioner shall provide technical assistance to the district.  If necessary, the commissioner may authorize an in-depth evaluation of the district to determine the causes for the district's fiscal concerns.

     1(3) The district shall post the determination and the improvement plan adopted by the board of education pursuant to this section in a prominent place on the Internet website of the district.

     [d.] e.1  The commissioner shall review the district's progress in implementing the improvement plan not less than once every six months.  If the commissioner finds, based on those reviews, that after two years the district’s fiscal condition has not substantially improved in accordance with regulations established by the commissioner pursuant to section 6 of P.L.   , c.    (C.        ) (pending before the Legislature as this bill), the commissioner may require the district to amend the improvement plan.

     e. 1[e.] f.1  All improvement plans developed pursuant to this section shall be in coordination with any corrective action plans developed pursuant to section 3 of P.L.    , c.    (C.       ) (pending before the Legislature as this bill).

     f. 1[f.] g.1  The Department of Education shall provide training to each school district on the Comprehensive Statewide Fiscal Early Warning System.

     g. 1[g.] h.1  The department may hire any additional staff as may be necessary to develop and administer the Comprehensive Statewide Fiscal Early Warning System established pursuant to section 4 of P.L.    , c.    (C.       ) (pending before the Legislature as this bill).

    STATEMENT        This bill expands the duties of the executive county business official and establishes processes for the fiscal review of school districts by the executive county superintendent and the Commissioner of Education.

     Under current law, the commissioner is required to appoint an executive county business official to serve in the office of the executive county superintendent of schools for a term of three years.

This bill permits a county to hire multiple executive county business officials based on the number of municipalities the county serves.

This bill clarifies that any individual appointed for this position is required to hold an appropriate certificate issued by the State Board of Examiners and have experience in school finance, budget planning, and governmental accounting.  The bill also expands the duties of the executive county business official to require, among other duties, more substantial oversight of the fiscal conditions of the schools in the county.

     The bill requires the executive county business official to, on a rolling basis, conduct fiscal reviews of each school district under its purview on a timeline established by the executive county superintendent.  The bill provides the information that is to be included in each fiscal review.

A copy of each fiscal review will be submitted to the board of education of the school district, the superintendent of schools, the executive county superintendent, and the commissioner.

The report will include a summary of the executive county business official’s findings, an analysis of any areas of fiscal concern, and recommendations for corrective action.

     The bill requires the establishment of corrective action plans for certain school districts whose fiscal reviews identify significant fiscal concerns in two consecutive reviews.

The bill establishes a process to notify the executive county superintendent, commissioner, and the school district.

The school district is then required to submit a corrective action plan and be monitored by the executive county superintendent and executive county business official.  The bill details a process to impose certain remedial actions if a school district fails to implement the corrective action plan.

The bill stipulates that the commissioner has the authority to take any action necessary to correct continuous fiscal concerns in a district which fails to implement the corrective action plan.

     The bill also requires the commissioner to develop and administer a Comprehensive Statewide Fiscal Early Warning System.

The system will monitor financial risk indicators, as established in the bill, utilizing  information reported by school districts throughout the fiscal year to enable timely and structured intervention of districts that are at risk of financial distress.

     Under the bill, the Comprehensive Statewide Fiscal Early Warning System will establish a fiscal categorization system where each district is annually categorized as low, moderate, or high fiscal risk pursuant to fiscal standards developed by the commissioner.

The commissioner will provide notice to the school district and the executive county superintendent when any district is categorized as moderate or high fiscal risk.

The bill requires a district categorized as a moderate or high fiscal risk to develop an improvement plan to address any fiscal concerns identified by the commissioner.       The bill establishes a procedure to create an improvement plan and requires the commissioner to review the district’s progress in implementing the improvement plan not less than every six months.  The bill grants the commissioner authority to require a school district to amend the improvement plan if the district’s financial condition has not substantially improved.

If, after six months the district fails to take remediate action and address the fiscal concerns addressed in the amended plan, the commissioner will issue the district a letter detailing the areas in which the district remains deficient.       The bill stipulates that all improvement plans developed under the Comprehensive Statewide Fiscal Early Warning System are to be developed in coordination with any corrective action plans developed by the executive county superintendent pursuant to the provisions of the bill.

The bill also requires the Department of Education to provide training to each school district on the Comprehensive Statewide Fiscal Early Warning System.

     The bill permits the executive county superintendent and the department to hire additional staff to effectuate the provisions of this bill at the expense of the State.