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Bill

S 4387

"Intellectual and Developmental Disabilities Provider Transparency and Financial Accountability Act."

2026-2027 Regular Session Introduced by John McKeon

The bill requires standardized financial reporting and a public data portal for provider-funded I/DD residences/programs to improve transparency, accountability, and direct care fu

Introduced in the Senate, Referred to Senate Health, Human Services and Senior Citizens Committee
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Bill Summary · S 4387

Summary of Bill S 4387 (Session 222) – New Jersey

Purpose and intent

  • Enacts the “Intellectual and Developmental Disabilities Provider Transparency and Financial Accountability Act.”
  • Aims to increase financial transparency and accountability for provider managed residences and programs that serve individuals with intellectual or developmental disabilities (I/DD).
  • Seeks to provide the public with access to standardized financial data and to assess whether policies are needed to improve direct care salaries and oversight.

Key definitions

  • Direct care ratio: staffing standards limiting the number of individuals served by a direct support professional and measuring direct care hours per individual.
  • Direct support professional: staff who provide direct care and services to individuals with I/DD.
  • Provider managed residence and program: a residence, facility, or program licensed or authorized by the Department of Human Services (DHS) to provide I/DD services.
  • Related-party transaction: a business arrangement where board members, executives, or their immediate family have a financial interest.

Major provisions

1) Standardized chart of accounts

  • Within 180 days of enactment, the DHS (in consultation with the State Comptroller) must develop a standardized chart of accounts.
  • The chart must be disaggregated by each residence/program and include line items for:
    • Base wages, overtime, special pay, fringe benefits, payroll taxes for direct care professionals.
    • Salaries and bonuses for the five highest-compensated employees, and total compensation for any executive earning over $150,000 (including base pay, bonuses, deferred comp, fringe benefits).
    • Provider costs (capital investments, mortgage/rent, utilities, insurance, taxes).
    • Related-party transaction costs.
    • Marketing, advertising, public relations, legal, consulting, and lobbying expenses.

2) Quarterly expenditure reporting (for higher-funded providers)

  • Starting the first day of the fiscal year after the chart is developed, any provider receiving more than $250,000 annually in State and federal funds must submit quarterly expenditure reports with the standardized chart information.
  • Reports must include an attestation from the chief financial officer confirming accuracy.
  • If a report is not filed within 30 business days after quarter-end, DHS may withhold up to 10% of the residence/program’s monthly reimbursement until filed.

3) Reporting to the State Comptroller

  • DHS must submit copies of the standardized chart of accounts and quarterly expenditure reports to the State Comptroller within 30 business days of receipt for audits.

4) Annual disclosure of related-party transactions

  • Each provider must file an annual disclosure statement identifying all related-party transactions involving State or federal funds, including parties involved, nature of the transaction, and total dollar amount.
  • Disclosure due within six months after the end of the residence/program’s fiscal year.

5) State Comptroller annual audits

  • The State Comptroller shall conduct annual financial audits of at least 5% of provider residences/programs using standard audit practices.
  • If audits reveal material misrepresentations, the Comptroller may direct the DHS to suspend/revoke licenses or certifications or impose civil penalties.

6) Public transparency portal

  • DHS must create and maintain a publicly accessible Internet portal within 12 months of enactment.
  • The portal will aggregate information from the standardized chart of accounts and quarterly reports to:
    • Allow the public to search/view data in one place.
    • Help users compare total revenue, direct care wages, and administrative costs across residences/programs.

7) Government reporting and policy analysis

  • Three years after development of the standardized chart of accounts, DHS must provide a report to the Governor and Legislature with analysis, including:
    • The average revenue percentage spent on direct care and recommendations on implementing a mandatory direct care ratio or an administrative cost cap (to improve direct care salaries while maintaining fiscal health).
    • Comparisons of direct care compensation vs. administrative costs.
    • Recommendations on payment structures, reimbursement rates, and wages for direct support professionals.

8) Rulemaking

  • DHS must adopt rules to implement the act under the Administrative Procedure Act.

9) Effective date

  • The act takes effect on the first day of the third month after enactment.

Who is affected

  • Provider managed residences and programs serving individuals with I/DD that receive State and federal funds (generally those with annual funding above $250,000).
  • Direct support professionals and their employers (provider managed residences/programs).
  • DHS (Department of Human Services), the State Comptroller, and the public via the transparency portal.

Procedural and timeline notes

  • Compliance milestones begin within 180 days for chart development.
  • Public portal must be operational within 12 months.
  • Annual audits target at least 5% of providers.
  • A follow-up analysis report to the Governor and Legislature is due three years after the chart’s development.
  • Noncompliance with reporting can trigger withholding of reimbursements and potential enforcement actions.

Potential impact

  • Increased transparency around how funds are spent, especially regarding direct care versus administrative costs.
  • Enhanced accountability for related-party transactions and executive compensation.
  • Public access to data enabling comparisons across provider residences/programs.
  • Data-driven policy considerations on whether to implement mandatory direct care ratios or administrative cost caps and how to adjust funding structures to improve direct care wages.

Compiled from official sources — confirm details with the bill’s official record.

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