N.J. Admin. Code § 5:30-17.4

Current through Register Vol. 56, No. 23, December 2, 2024

Section 5:30-17.4 - Local unit requirements

(a) Local units shall meet the following terms and conditions prior to executing contracts with disbursing organizations:

1. Prior to the execution of a contract with a disbursing organization, the governing body shall approve the use of disbursing organizations for the payment of claims pursuant to 5:30-17.3(a). Such approval shall describe those tasks to be performed by a disbursing organization to meet the governing body's objectives, including specific authorization to use electronic means for the disbursing of funds.

2. Permissible tasks for payroll services can include and are not limited to data collection, agency report preparation, calculation of withholding, direct deposit of payroll disbursements, or local unit transfer of funds to the disbursing organization's account for subsequent payment.

3. Permissible tasks for energy tracking and utility bill paying services can include:

i. Auditing, consolidation, and payment of utility accounts to ensure the proper account type and appropriate tariffs are being applied and usage is accurately recorded;

ii. Upon approval and transfer of funds by the local unit, payment of utility bills on the local unit's behalf; and

iii. Services related to (a)3i and ii above.

4. The governing body shall, by resolution, approve any renewal or extension of a contract under this subchapter.

5. Pursuant to 40A:5-17(a)(1) or 18A:19-4.1, the governing body shall designate an approval officer to be responsible for authorizing and supervising the activities of the disbursing organization. For authorities operating under 5:31-4.1, the governing body shall designate an approval officer to authorize and oversee the activities of disbursing organizations.

i. The governing body shall supplement the duties of the approval officer established in accordance with 40A:5-17(a)(2) and 18A:19-4.1 to include the reconciliation and analysis of all general ledger accounts affected by the activities of the disbursing organization.

ii. If the terms of the contract between the disbursing organization and the local unit provide that the disbursing organization will hold funds of the local unit pending transmittal of those funds to a payee, the governing body must specifically authorize the disbursing organization to hold the funds pending transmittal.

iii. The governing body shall require the disbursing organization to provide the governing body with notification in the event:

(1) The disbursing organization detects irregularities that may indicate potential fraud, noncompliance with appropriate laws, dishonesty, or gross incompetence on the part of the approval officer; or

(2) The disbursing organization experiences circumstances that could jeopardize its ability to continue operations or otherwise interrupt the services provided to the local unit.

iv. A transfer of local unit funds between local unit accounts, to a dedicated cash account or to an account owned or controlled by a disbursing organization shall be deemed a disbursement subject to the Local Fiscal Affairs Law, 40A:5-1 et seq., and is to be treated as in compliance with 18A:19-9 for school payrolls.

6. After the governing body has initially approved the use of disbursing organizations pursuant to 5:30-17.3 and (a) above, the CFO shall qualify disbursing organizations pursuant to the requirements of 5:30-17.5.

i. Prior to the execution of any contract for the provision of third-party disbursement services, the contract shall be reviewed and approved by the CFO of the local unit as to terms, including satisfaction of the requirements of 5:30-17.5 and 17.6

ii. Prior to the extension or renewal of a contract, the CFO shall complete a review of the services rendered under the contract. Such review shall be conducted in compliance with 5:30-17.5.

N.J. Admin. Code § 5:30-17.4

Amended by 48 N.J.R. 2607(a), effective 12/5/2016