The Division of Local Government Services (DLGS) has issued Local Finance Notice 2025-13 updating the Best Practices Inventory in accordance with the FY2026 Appropriations Act. The 2025 Best Practices Inventory assesses and evaluates each municipality’s compliance with various laws and the implementation of the best fiscal and operational practices.
New for this year, municipalities operating on both a State and Calendar Fiscal Year budget cycle must submit their completed Best Practices Inventory to DLGS by the close of business on Friday, October 24. DLGS recommends completing and submitting promptly to allow for time to address any technical or content-related issues that may arise. After the Best Practices Inventory is submitted, changes are subject to DLGS approval.
There are a total of 70 questions on the Best Practices Inventory, with six new scored questions and nine unscored questions. Each municipality must receive a minimum score of 32 to receive its full final aid payment. Based on the best practices inventory results, DLGS will decide if a portion of a municipality’s final formula aid payment will be withheld based on the following scoring criteria:
- 32 and greater: 100% payment, with no aid withheld.
- 28-31: 75% payment, 25% of final aid withheld.
- 24-27: 50% payment, 50% of final aid withheld.
- 0-23: No aid payment, 100% withheld.
- Failure to submit the Best Practices Inventory will be considered a zero score.
Please review Local Finance Notice 2025-9 for more information on FY26 State Aid to municipalities.
A municipality may appeal its score, but not before submitting the Best Practices Inventory. The deadline for appeals is Friday, October 24, 2025, and must be submitted via email to bestpractices@dca.nj.gov with the heading of “Best Practices Appeal.” Municipalities seeking to appeal should submit their appeal in conjunction with the Best Practices Inventory.
Please see DLGS Best Practice Inventory Instructions and the FAQ for more details concerning directions, login, and access information. If technical assistance is required, please email Matthew.Gallello@dca.nj.gov. For questions regarding the best practices inventory, please email bestpractices@dca.nj.gov.
Contact: Erin Knoedler, Legislative Analyst, eknoedler@njlm.org, 609-695-3481, x116.