The University of Medicine and Dentistry of New Jersey, which emerged this week from two years of federal oversight, has gotten a much improved bill of health from the federal monitor, according to a final report on its finances and management that was released today.

In the report, the federal monitor, Herbert J. Stern, said the nation’s largest public health-sciences university is a “much-changed institution” since allegations of fraud and corruption threatened to shut it down. Mr. Stern, a former federal judge who once called the university “a vehicle for patronage and favor peddling,” singled out major personnel and policy changes, including the appointment of a new president and a new, stronger Board of Trustees.

But Mr. Stern also warned of “significant challenges” facing the medical and dental university, including improving its capacity to conduct investigations of alleged misconduct. The monitor’s office has transferred more than 40 such inquiries to the university.

In a written statement, Anna Farneski, a university spokeswoman, said: “Much progress has been made, but we still have work to do in order to ensure the university continues to fulfill its mission as a statewide asset. We are developing more robust corrective and preventive action plans to identify those few who would still put their own self-interests first.”

The university agreed to the federal oversight in late 2005 as part of an agreement intended to shield the corruption-plagued institution from criminal prosecution on charges of Medicaid fraud. The university was not prosecuted, but a former dean and a powerful state senator face fraud and other charges. —Karin Fischer