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January 20, 2023

New Jersey's state colleges and universities could soon be required to release public financial reports

A new legislative package would also require audits every three years and additional oversight from the secretary of higher education

In a bid to increase financial accountability for New Jersey colleges and universities, state lawmakers introduced a package of bills Thursday that would require the schools to release public financial reports.

State Sen. Joe Cryan, Assemblywoman Mila Jasey and Secretary of Higher Education Dr. Brian Bridges spearheaded the package, with the support of Gov. Phil Murphy.

Cryan said it is essential to bring oversight to the state's schools of higher learning, because taxpayers and students or families that pay tuition deserve to see how their money is being spent.

Jasey, meanwhile, believes that the package of bills is essential to ensuring these schools can support a full range of degrees, programs and services. 

"Transparency in information is a key tenant of our State Plan for Higher Education, and a robust legislative package aimed at increasing transparency at public institutions of higher education ensures that our students see a more effective return on their investments," Bridges said. "By building a stronger accountability model, New Jersey can better safeguard the long-term financial sustainability of our colleges and universities."

The first of the three bills would require schools to submit annual fiscal monitoring reports to the secretary of higher education and go through an audit every three years. Under the bill, the secretary can also require additional audits and appoint someone to directly oversee a school's fiscal operations if an audit points to financial instability.

The second bill would require schools to publicly share their fiscal monitoring reports on their websites, including any audit reports.

The final bill calls for board members for the schools to complete training that would clearly define their roles, specifically concerning the institution's financial management, to ensure their schools are making sound financial decisions. 

"When institutions are in financial distress, it is often the students and staff who are subjected to the greatest turbulence and uncertainty," Murphy said. "As public institutions of higher education, these schools are accountable to the government and the taxpayers of our state. This legislation will promote greater fiscal accountability among our public institutions of higher education on behalf of all those working and studying at these New Jersey institutions."

Tuition costs have continued to rise across New Jersey. Most four-year schools in the state increased their annual fees for students by 3% for the 2022-2023 school year, the New Jersey Digest reported. The increase has been attributed to financial difficulties brought on by the COVID-19 pandemic, after schools instituted a freeze on their tuition during the 2020-2021 school year. Rutgers University, for example, anticipated a financial loss of $67 million following the freeze and changes in enrollment.

Lawmakers say the bills would increase accountability for these universities, so that students and their families do not have to bear the brunt of the schools' financial woes.

"If New Jersey taxpayers are going to be asked to continue funding higher education, then we need to be assured those funds are being well managed and spent prudently. These three proposed bills will help ensure that our educational institutions continue providing the best education in the nation for years to come," Township of Union Mayor Manny Figueiredo said. 

The next step for the legislative package is a vote.