New Jersey Administrative Code
Title 5 - COMMUNITY AFFAIRS
Chapter 30 - LOCAL FINANCE BOARD
Subchapter 5 - CERTIFICATIONS OF AVAILABILITY OF FUNDS, AND ACCOUNTING SYSTEM REQUIREMENTS FOR LOCAL UNITS
Section 5:30-5.2 - Encumbrance systems
Universal Citation: NJ Admin Code 5:30-5.2
Current through Register Vol. 56, No. 18, September 16, 2024
(a) All local units except those subject to the Local Authorities Fiscal Control Law (N.J.S.A. 40A:5A-1 et seq.) shall maintain an encumbrance accounting system for all funds as follows:
1. The system shall be designed at a minimum
to record charges to amounts appropriated for "Other Expenses" in the same or
greater level of detail as "Other Expenses" are maintained in the adopted
budget. This shall be done in such a way to record charges against amounts
appropriated at the time the charges are authorized so that the funds allocated
for such purposes are reserved and cannot be used for other charges within that
line item. Examples of such authorization actions include the issuance of a
purchase order or the execution of a contract.
2. If the local unit budget uses a greater
detail level through the use of object accounts, transactions shall be
encumbered at the object level detail.
3. Local units shall maintain internal
controls that ensure that all purchases charged to "Other Expense" or other
non-salary line items shall be sequentially numbered through a computerized
system that produces appropriate purchasing internal control.
(b) The Director of the Division of Local Government Services shall make available such technical documents as may be advisable to local units to provide further guidance on encumbrance systems.
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