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
Universal Citation: NJ Admin Code 5:30-17.4
Current through Register Vol. 56, No. 18, September 16, 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.
Disclaimer: These regulations may not be the most recent version. New Jersey may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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