TRENTON – Legislation sponsored by Senator Shirley K. Turner to create the “School District Fiscal Accountability Act” to provide loans to school districts like Willingboro, which are running deficits, became law today.
“This law is designed to help handle the problems that arise when a school district encounters financial problems related to poor fiscal management or oversight,” said Senator Turner, D-Mercer, and Chairwoman of the Senate Education Committee. “The ‘School District Fiscal Accountability Act’ empowers the State to step in when school districts run a deficit, and help the school turn around their specific economic situation without having to completely take over the day-to-day operations of the school district.”
“Until now, the Department of Education did not have the authority to mandate monitoring or corrective action in a faltering district,” said Senator Turner. “With this law a State monitor will be able to provide direct oversight of the district’s business operations and personnel matters. The monitor would also ensure that a plan is put into place to address the circumstances that led to any deficit so that they do not occur in the future.”
The enacted bill, S-1469, gives State aid payments to districts that have a budget deficit during any given fiscal year. Under the law, the State would also appoint a State monitor empowered to take action within the school district to reestablish financial stability in the district.
Senator Turner added that the State monitor would be responsible for overseeing the expenditures of district funds, and ensuring the development and implementation of a plan to get the district’s finances back on track.
“School administrators and school board members occasionally make mistakes, but this law puts safeguards into place to ensure that financial mistakes do not become a pattern of fiscal malfeasance,” said Senator Turner.
According to Senator Turner, the New Jersey Department of Education would create a “School Deficit Relief Account” to provide advance aid payments to a school district in economic distress if the Commissioner of Education recommends such action.
Senator Turner noted that, “Any advance payments would be deducted from future State aid over the course of ten years.”