S1691

An Act concerning investigations of abuse of public funds at public institutions of higher education and supplementing Title 18A of the New Jersey Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. The Legislature finds and declares that:

a. The State provided $1.2 billion in aid directly to public institutions of higher education in the current fiscal year, including between $10 million and $350 million to each senior public institution of higher education. As recipients of public funding, it is appropriate that institutions of higher education be held to a high standard of fiscal responsibility, however, in recent years, there have been numerous reports of funds being misused at public institutions of higher education in the State.

b. Athletics departments have been among the poorest stewards of public funds, operating at deficits and failing to curb expenses, and placing the financial burden on the State despite having more revenue streams than academic departments. Individual student athletes are now able to profit off their name, image, and likeness, which should decrease the burden on the institution to provide for student athletes outside of their athletic duties. Furthermore, as representatives of their institution, and by extension, the State, and as potential role models, it is reasonable to hold student athletes, staff, and other members of athletics departments to a higher standard of accountability.

c. Given the significant amount of funds given to public institutions of higher education by the State, and the reports of misused funds, it is fitting that the Office of the Secretary of Higher Education have the ability to investigate credible accusations of abuse of public funds.

2. a. As used in this section, an “entity of a public institution of higher education” means any student, employee, division, department, center, team, organization, or other organized group associated with a public institution of higher education.

b. Any person may file a complaint alleging an abuse of public funds by an entity of a public institution of higher education by submitting it, on a form prescribed by the Secretary of Higher Education, to the Office of the Secretary of Higher Education.

c. The Secretary of Higher Education shall appoint a special auditor who shall have the authority to investigate any claims of abuse of public funds by any entity of a public institution of higher education. The auditing of the accounts of public institutions of higher education pursuant to this section shall be made only by a certified public accountant of the State. The special auditor shall subscribe to the following declaration:

(1) That they are fully acquainted with the laws governing the fiscal affairs of public institutions of higher education of New Jersey and are a competent and experienced auditor; and

(2) That they will honestly and faithfully audit the books and accounts of any public institution of higher education when engaged to do so, and report any error, omission, irregularity, violation of law, discrepancy or other nonconformity to the law, together with their recommendations, to the Secretary of Higher Education and the governing board of the public institution of higher education.

d. Upon receipt of a complaint, the special auditor shall serve a copy of the complaint on each entity named therein and shall provide each named entity with the opportunity to submit a written statement under oath. The special auditor shall thereafter decide whether probable cause exists to credit the allegations in the complaint.

If the special auditor determines that probable cause exists, the special auditor shall conduct an investigation into the allegation of abuse of public funds by the entity named in the complaint. In making a determination regarding an alleged abuse of public funds, the burden of proof shall be on the accusing party to establish factually an abuse of public funds. Upon completion of the investigation, the special auditor shall determine whether the conduct complained of constitutes an abuse of public funds or whether the complaint should be dismissed. The special auditor shall state in writing their findings of fact and conclusions of law. A decision regarding the complaint alleging abuse of public funds shall be rendered by the special auditor within 90 days of the receipt of the complaint by the special auditor.

e. If the special auditor decides that probable cause does not exist, they shall dismiss the complaint and shall notify the complainant and any individual named in the complaint, and the special auditor may impose on the complainant a fine not to exceed $500. The standard for determining whether a complaint has probable cause shall be the same as that provided in subsection b. of section 1 of P.L.1988, c.46 (C.2A:15-59.1). The dismissal shall constitute final agency action.

f. If an entity of a public institution of higher education is found to have abused public funds, the entity who committed the abuse shall repay to the State the total amount of funds which is deemed to have been misused. The institution shall be fined an amount equal to the total cost of the investigation multiplied by 1.25. The Office of the Secretary of Higher Education shall use funds received as a result of any fines issued to fund future investigations.

g. A governing board of a public institution of higher education, or any employee of the board, shall not take any retaliatory action against an employee or a student at the public institution of higher education because the individual:

(1) submits a complaint of abuse of public funds to the special auditor; or

(2) provides information to, or testifies before, the special auditor conducting an investigation into an allegation of abuse of public funds.

3. The Secretary of Higher Education, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410(C.52:14B-1 et seq.), shall adopt rules and regulations to effectuate the provisions of this act.

4. This act shall take effect immediately.

STATEMENT

This bill directs the Secretary of Higher Education to appoint a special auditor to investigate claims of abuse of public funds at public institutions of higher education.

Any person would be able to file a complaint alleging abuse of public funds to the special auditor. Upon receipt of a complaint, the special auditor would be required to serve a copy of the complaint on each individual named therein and provide each named individual with the opportunity to submit a written statement under oath. The special auditor would subsequently decide whether probable cause exists to credit the allegations in the complaint. If the special auditor determines that probable cause exists, the special auditor would conduct an investigation into the allegation of abuse of public funds. In making a determination regarding an alleged abuse of public funds, the burden of proof would be on the accusing party to establish an abuse of public funds. Upon completion of the investigation, the special auditor would determine whether the conduct complained of constitutes an abuse of public funds or whether the complaint should be dismissed, and state in writing their findings. The special auditor would be required to issue a decision regarding the complaint within 90 days of receiving the complaint.

If an entity of a public institution of higher education is found to have abused public funds, the entity would be required to repay to the State the total amount of funds deemed to have been misused. The institution would also be fined an amount equal to the total cost of the investigation multiplied by 1.25. The Office of the Secretary of Higher Education would use funds received as a result of any fines issued to fund future investigations.

A governing board of a public institution of higher education, or any employee of the board, would be prohibited from taking any
retaliatory action against an employee or a student at the public institution of higher education because the individual: (1) submits a complaint of abuse of public funds to the special auditor; or (2) provides information to, or testifies before, the special auditor conducting an investigation into an allegation of abuse of public funds.