[HISTORY: Adopted by the Township Council of the Township
of Ewing as indicated in article histories. Amendments noted where
applicable.]
[Adopted 1-10-2012 by Ord. No. 11-27]
A.
Authorization. Pursuant to the terms and provisions of this article,
the Township may use the services of third-party disbursement service
organizations for payroll and payroll tax payment purposes to prepare
the necessary documentation and execute disbursements from the Township-authorized
banking institutions on behalf of the Township.
B.
Permitted actions. Such third-party disbursement service organizations
may use electronic means for such disbursements. In addition, the
organizations may perform tasks including but not limited to data
collection, agency report preparation, calculation of withholding
or direct deposit of payroll disbursements. Such organizations may
transfer Township funds to third-party disbursement service organization
bank accounts for subsequent payment to the appropriate payee, subject
to the provisions of this article.
C.
Approved officer. The Township Chief Financial Officer shall be the
approval officer and shall be responsible for authorizing and supervising
the activities of the disbursing organizations. In addition to such
other statutory responsibilities of the approval officer, the approval
officer shall reconcile and analyze all general ledger accounts affected
by the activities of the disbursing organization.
D.
Responsibility of disbursing organization. The disbursing organization
shall notify the Township in the event the disbursing organization
detects irregularities that may indicate potential fraud, noncompliance
of appropriate law, dishonesty or gross incompetence on the part of
the approval officer or if the disbursing organization experiences
circumstances that could jeopardize its ability to continue operations
or otherwise interrupt services provided to the Township.
E.
Responsibility of Chief Financial Officer. It shall be the responsibility
of the Chief Financial Officer ("CFO") to approve the use of third-party
disbursement organizations, and the CFO shall qualify the organization
in accordance with the provisions set forth hereafter. Prior to the
execution of a contract for the provision of third-party disbursement
services, the CFO shall review and approve the contract in accordance
with the provisions set forth hereafter. Prior to the extension or
renewal of any contract, the CFO shall complete a review of the services
rendered under the contract in accordance with the provisions set
forth hereafter.
F.
Conditions. Prior to approval, the third-party disbursement organization
shall meet the following conditions and requirements:
(1)
The disbursing organization shall provide evidence of satisfactory
internal control as may be required by the Township CFO. Such evidence
may include the following:
(a)
Reports on policies and procedures placed in operation and tests
of operating effectiveness, performed pursuant to the American Institute
of CPAs ("AICPA") Statement on Auditing Standards No. 70;
(b)
A completed SysTrust™ examination with an unqualified
report on availability, security, integrity and maintainability, completed
in accordance with AICPA/CICA SysTrust™ Principles and Criteria
for Systems Reliability; or
(c)
Evidence of compliance with a mutually agreed external standard
for determination of the sufficiency of a system of internal controls
that supports the work to be performed in accordance with the policies
established by the Township; and
(2)
All disbursing organizations shall have offices within a distance
acceptable to the CFO such that the physical delivery and receipt
of documents and records can occur in a manner that assures the delivery
of paychecks on regularly scheduled paydays.
G.
Contracts; requirements. No third-party disbursement organization
shall perform services for the Township unless the Township enters
into a written agreement for such services with the organization on
the terms and conditions set forth hereafter:
(1)
All contracts between the Township and third-party disbursement organizations
shall provide as follows:
(a)
Adequate provisions to indemnify the Township against losses
incurred as a result of actions or inactions by the organization,
its agents, employees and officers. In the event the organization
has access Township funds, such provisions shall include that the
organization shall provide adequate insurance, with the Township named
as an additional insured, to cover possible losses equal to or greater
than the highest level of exposure in a thirty-day period, which shall
be not less than net payroll and all taxes due and owing to governmental
entities;
(b)
Requirements that the organization be responsible for errors
and omissions of its agents, employees and officers, particularly
where such errors and omissions prevent the timely disbursement of
payments on behalf of the Township and include penalties, fines, interest
or damages; and
(c)
In such cases as the organization takes possession of Township
funds, the disbursing organization shall provide adequate insurance
to cover such losses as may arise as a result of errors, omissions,
failure to perform or dishonesty in amounts at least equal to the
highest level of exposure to the Township for 30 days. Such exposure
as regards cash shall be based on at least the amount of money accessible
by the organization during said thirty-day period and shall not include
moneys that the organization cannot convert to its own benefit.
(2)
All third-party disbursement services organizations shall have a
written complaint procedure which requires, at a minimum, that all
complaints be maintained in a complaint log which shall be available
to the Township for inspection at the request of the Township.
(3)
On reasonable notice, which shall be not less than 30 calendar days,
the organization shall permit an independent audit at the cost of
the Township to examine its internal controls applying SAS 70 standards,
SysTrust™ standards and other standards and procedures which
may be mutually agreed to assure an accurate, complete and timely
work product. Such independent audits shall be provided to the CFO
and the Township governing body and shall be for Township internal
use only.
(4)
All disputes between the Township and third-party disbursement services
organizations, whether concerning the contract or the operations performed
under the contract, shall be in writing and forwarded to the other
party by registered mail. For the Township, such written disputes
shall be directed to the Township CFO and the Township Clerk. The
contract shall provide for dispute resolution between the parties.
The contract shall provide for service of process to the third-party
disbursement services organization in New Jersey. The contract shall
provide for review and enforcement by a court of competent jurisdiction
of the State of New Jersey applying New Jersey law.
(5)
Within five days of each disbursement on behalf of the Township,
the organization shall provide the CFO with reports and documentation
supporting the disbursements. The organization shall provide such
information as may be required, from time to time, by the Township
to enable it to reconcile its books and records.
(6)
All corrections and adjustments must be completed and provided to the Township promptly. All adjustments and reports of adjustments resulting in disbursements must be reported as in Subsection G(5) above.
(7)
Copies of notices, memoranda, complaints or other correspondence
shall be forwarded to the Township within 48 hours of receipt.
(8)
Contracts for third-party disbursement services are not data processing
service contracts under N.J.S.A. 40A:11-15(5).
(9)
The contract shall provide for termination of the contract, including
but not limited to a provision for termination for failure to perform
on the part of the disbursement organization. Such termination shall
be made effectively immediately upon written notice to the organization
from the Township.
(10)
The contract shall be in writing and executed by all parties, including
intermediaries, such as banks providing payroll services as part of
a compensating balance agreement.
(11)
The contract shall provide that no disbursement shall be made unless
the demand for payment complies with the provisions of N.J.S.A. 40A:5-16
and this article.
