New Jersey Administrative Code › Title 5 - COMMUNITY AFFAIRS › Chapter 30 - LOCAL FINANCE BOARD › Subchapter 17 - ELECTRONIC DISBURSEMENT CONTROLS FOR AUTHORIZED THIRD-PARTY DISBURSEMENT SERVICES › Section 5:30-17.4 - Local unit requirements

Current through Register Vol. 56, No. 14, July 15, 2024
(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.