§ 86-3. Third-party payroll services.

A. 

Introduction.

(1) 

The Local Finance Board of the State of New Jersey (LFB) has adopted rules regarding "Electronic Disbursement Controls for Payroll Purposes" in order to provide formal authority for municipalities to engage third-party payroll services/disbursing services to disburse funds to payroll agencies.

(2) 

In order to have a payroll service provide disbursement services, the Mayor and Council of the Borough must approve such a third-party having access to Borough funds and assigning responsibility to a Borough official to oversee the process and approve all contracts or extensions.

B. 

Purpose; definitions.

(1) 

It is the Borough's intent to abide by the requirements of N.J.S.A. 52:27D-20.1 and N.J.A.C. 5:30-17.1 et seq., governing electronic disbursement controls and payroll purposes.

(2) 

As used in this section, the following terms shall have the meanings indicated:

APPROVAL OFFICER

The person within the Borough responsible for authorizing and supervising the activities of the payroll service.

PAYROLL SERVICE

A third-party payroll service organization or entity.

C. 

Authorization.

(1) 

The Borough is authorized to use a payroll service to prepare payment documentation, take possession of Borough funds and make such disbursements itself on behalf of the Borough.

(2) 

The following payroll service providers shall be required to comply with these regulations.

(a) 

Payroll service providers who use their own customized programming process to execute disbursements for the Borough; and

(b) 

Payroll service providers who use a third-party processor to execute disbursements for the Borough.

D. 

Borough requirements.

(1) 

The appointment of a payroll service shall be made pursuant to the Local Public Contracts Law and shall require the payroll service to perform the following services, not by way of limitation: data collection, agency report preparation, calculation of withholding, direct deposit of payroll disbursements, and/or transfer of Borough funds to the payroll service provider's account for subsequent disbursement of payment.

(2) 

Any renewal or extension of the contract with the payroll service shall be pursuant to the Local Public Contracts Law.

Editor's Note: See N.J.S.A. 40A:11-1 et seq.

(3) 

The Borough's Chief Financial Officer shall serve as the approval officer and shall be responsible for authorizing and supervising the activities of the payroll service and be charged with the reconciliation and analysis of all general ledger accounts affected by the activities of the service.

(4) 

The Borough, in its sole discretion, may provide in the contract with the payroll service that the payroll service shall be permitted to hold Borough funds pending transmittal to a payee.

E. 

Payroll service requirements.

(1) 

The payroll service shall satisfy all of the following requirements:

(a) 

Report any irregularities that may indicate potential fraud, noncompliance with appropriate laws, dishonesty or gross incompetence on the part of the approval officer.

(b) 

Report circumstances that could jeopardize the payroll service's ability to continue operations or otherwise to interrupt the services provided by the service to the Borough.

(2) 

The payroll service shall satisfy the requirements of N.J.A.C. 5:30-17.5, requiring that the approval officer be assured that the payroll service has its own internal controls and will appropriately guard against theft and other adverse conditions.

(3) 

Contracts which are entered into pursuant to this section of the Borough Code and the laws authorizing such a contracts shall comply with the requirements of N.J.A.C. 5:30-17.6, which sets out a series of mandatory contractual terms and conditions.

F. 

Establishment of service. The Mayor and Council shall by resolution authorize the Mayor and Borough Clerk to enter into a contract for payroll services.

Added 9-13-2011 by Ord. No. 11-11R