[Adopted 2-16-2010 by Ord. No. 1544]
The governing body does hereby authorize the use of a third
party disbursement service organization for payroll, including:
A. Preparation of the necessary payment documentation and execution
of disbursement of the local unit's bank account on behalf of
the local unit;
B. Preparation of payment documentation, taking possession of local
unit funds and making such disbursement itself on behalf of the Borough;
and
C. Any combination of Subsections
A and
B above.
The following words and terms, as used in this article, shall
have the following meanings, unless the context clearly indicates
otherwise:
CHIEF FINANCIAL OFFICER (CFO)
The individual statutorily responsible for supervising the
accounts and finances of a local unit, including any certifying and
approval officer appointed pursuant to N.J.S.A. 40A:5-17, Subdivision
a, or such individual in similar capacity legally appointed by the
governing body of the Borough.
CONTRACT
Any written agreement entered into by a local unit and a
disbursing organization for the purposes authorized in this article.
DEDICATED CASH ACCOUNT
A demand deposit bank account owned by the local unit and
funded solely for use by a disbursing organization in performing its
duties and responsibilities in accordance with the contract.
DISBURSEMENT
Any payment of moneys, including any transfer of funds, by
any means, to the dedicated cash account established for use by a
disbursing organization.
PAYMENT DOCUMENTATION
Includes transmittals, remittance forms, tax returns, releases,
filings, reports, and tapes supporting the disbursement of funds.
PAYROLL
The object and result of all preparations and calculations
for, and the disbursement of salaries and wages, all withholdings
therefrom, and additional liabilities related thereto.
THIRD-PARTY DISBURSEMENT SERVICE
Such service or services of the type describe in this article.
Such service or services may include the processing and disbursing
payroll and payroll agency obligations.
TRANSACTION
Any activity that, in accordance with sound fiscal practices,
affects the general books of entry, ledgers, records, or logs of a
local unit.
The governing body shall by a resolution approve any renewal
or extension of a Contract for third party disbursement service organization.
A. 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 N.J.A.C. 5:30-17.3(a). Such
approval must describe the specific tasks to be performed by a disbursing
organization, including specific authorization to use electronic means
for the disbursing of funds. The Contract may include, and is not
limited to, data collection, agency report preparation, calculation
of withholdings, direct deposit of payroll disbursements, all Borough
transfers of funds to disbursing organizations, and account for subsequent
payment.
B. The governing body does, pursuant to N.J.S.A. 40A:5-17a(1), designates
the Chief Financial Officer to be responsible for authorizing and
supervising the activities of the disbursing organization. The Chief
Financial Officer shall be the approval officer to authorize and oversee
the activities of the third party disbursing organization.
C. The approval officer shall be responsible and shall include the reconciliation
and analysis of all general ledger accounts affected by the activities
of the disbursing organization.
The Borough must meet the following terms and conditions prior
to executing a contract with a disbursing organization. Prior to the
execution of a contract with a disbursing organization, the Governing
Body shall approve the use of the disbursing organization for the
payment of claims pursuant to N.J.A.C. 5:30-17.3(a). Such approval
must describe those tasks to be performed by disbursing organization
to meet the governing body's objectives including specific authorization
to use electronic means for the disbursing of funds. The Borough may
permit and include and is not limited to data collection, agency report
preparation, calculation of withholding, direct deposit of payroll
disbursements or Borough transfer of funds to disbursing organizations
account for subsequent payment.
Disbursing organizations shall meet the following conditions
and/or requirements:
A. The disbursing organization must provide evidence of satisfactory
internal control, evidence for which shall be required by the CFO.
Such evidence may be:
(1) The disbursing organization's report on policies and procedures
placed in operation and tests of operating effectiveness, performed
pursuant to American Institute of Certified Public Accountants (AICPA)
Statement on Auditing Standards No. 70; or
(2) A completed SysTrustTM examination with
an unqualified report on availability, security, integrity and maintainability
completed in accordance with the AICPA/CICA SysTrustTM principles and criteria for systems reliability; or
(3) Evidence of compliance with a mutually agreed upon external standard
for determination of the sufficiency of a system of internal controls
that support the work to be performed in accordance with the policies
established by the local unit.
B. All disbursing organizations must have offices within a distance
acceptable to the CFO of the local unit such that the physical delivery
and receipt of documents and records can occur on the same day.