New Accountability Regulations Affect BOEs

New Accountability Regulations Affect All Boards of Education and Charter Schools

By Gina L. Anton

Suggestions proposed months ago by the New Jersey Legislature for operating in the most efficient manner have now become mandatory rules for school districts and charter schools in the State. The regulations range from broad to narrow in nature and touch upon virtually all aspects of a district’s operations. Most school districts are expected to be in compliance by October 1, 2008 or risk losing their State aid.

Background

The new regulations were established to assure the financial accountability of boards of education through enhanced State monitoring and to ensure that each board adopts an annual budget that provides adequate resources to meet the State’s Constitutional mandate for a thorough and efficient system of free public schools. Essentially, these rules set the roles for the Commissioner of Education and Executive County Superintendents and establish mechanisms to ensure efficient expenditure of funds. The following highlights just some of the requirements of the new regulations.

More Oversight by the Executive County Superintendents

The regulations delegate more oversight to the Executive County Superintendents, including reviewing, approving and/or altering employment contracts between the board and a superintendent, deputy superintendent, assistant superintendent and school business administrator. See Regulations, Subchapter 3, for specific contractual provisions requiring scrutiny.

New Procedures for Professional Legal Services

The regulations require the local Board to establish procedures to ensure the prudent use of legal services by employees and board of education members. At a minimum, the procedures must include:

A limitation on the number of contact persons with authority to request services or advice from contracted legal counsel

Criteria to prevent the use of legal counsel unnecessarily for management decisions or readily available information

A requirement that all requests for legal advice be made in writing and a process to determine whether the request warrants legal advice or if legal advice is necessary

A log of all legal counsel contact maintained, including name of legal counsel contacted, date of contact, issues discussed and length of contact

A requirement that all contracts for legal services must comply with statutory payment requirements and restrictions.

In addition, the regulations mandate that all professional service contracts must be issued in a deliberate and efficient manner and are limited to non-recurring or specialized work for which the district does not possess adequate in-house resources or expertise.

Financial Accountability of Paramount Importance

All districts are required to maximize revenue from the Special Education Medicaid Initiative Program, fully comply with public bidding laws and must perform an annual audit from an independent accountant or firm. Further, all costs, meals, activities and travel expenditures will be scrutinized.

Deadline for Compliance

The new regulations allow the Commissioner of Education to withhold State aid from school districts that fail to comply with specific standards set forth by statue and covering a wide range of areas. Most school districts are required to implement new policies by October 1, 2008; however, Abbott districts must implement the policies immediately.

Areas Requiring New or Revised Policies

The new regulations also indicate certain subject areas that will require new or revised policies:

Nepotism Policy: The new policy prohibits the employment of the relatives of school board members or chief school administrators. Relatives already working for the district may continue their employment; however, their promotions will require the approval of the Executive County Superintendent. In addition, administrators are prohibited from supervising a relative or from participating in contract negotiations affecting a family member.

Contributions to Board Members: School boards are now prohibited from awarding certain contracts to businesses that have made a reportable contribution to any board member during the preceding one-year period. Additionally, businesses currently working for a district are prohibited from making reportable contributions to any board member during the term of a contract.

Segregation of Duties: The Business Administrator now has a duty to identify processes that when performed by the same individuals violate the sound segregation of duties. The new regulations mandate that the functions of human resources and payroll and the functions of purchasing and accounts payable must be segregated and performed by different employees.

Standard Operating Procedures for Business Functions: By July 1, 2009, all school districts must establish a standard operating procedures manual that addresses each task or function of the business operations of the district. Districts with budgets in excess of $25,000,000.00 or with more than 300 employees must also maintain an integrated planning database that must be fully implemented by the 2010-2011 school year. Districts must maintain a complete and up-to-date automated position control roster to track the number and category of employees and detailed information for each by July 1, 2009. School boards will also be required to adopt new policies regarding district financial systems and payments.

Facilities and Vehicle Maintenance: Any school district with three or more buildings are required to have an automated work order system in place for all maintenance and repair requests for all school district building and ground by July 1, 2009. A district must also adopt a policy for the assignment, management, control and regulatory supervision of school district vehicles.

Board Travel Policy: As a condition of receiving State aid, each district must establish specific policies and procedures on travel that comply with guidelines promulgated by the Department of Education and the Office of Management and Budget.

Implementation of the New Budget Process

The new regulations provide for a much greater role by the Executive County Superintendents (ECS) in the budget approval process. In particular, the ECS will be reviewing district efficiency in the areas of administrative and non-instructional expenditures, as well as general business practices. The ECS will also have the authority to conduct a year-end review of district expenditures. The new regulations provide additional authority to the Commissioner to ensure that districts achieve T & E and Core Curriculum Content Standards, including the ability to direct additional expenditures or reduce proposed budgets. The regulations also provide for new detailed procedures to be followed after the defeat of a school budget.

To view the new regulations in their entirety, visit: www.state.nj.us/education/code/current/title6a/chap23a.pdf.

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Peter S. Moeller

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Gina L. Anton

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