CHAPTER 10  LOCAL BUDGET AND FISCAL AFFAIRS

 

 

I.           THE MUNICIPAL FINANCE ORGANIZATION   10/1/07; 9/15/10

 

Among the options available for the organization of municipal finance activities is a centralized or decentralized format.  The finance function is centralized when one department is responsible for all major financial functions including, but not limited to, tax assessment, tax collection, accounting, budgeting, purchasing, and treasury management.  In most cases, the head of such a department, typically the Chief Financial Officer, reports directly to the Mayor, Manager, or Administrator.  It is generally agreed that a centralized finance department provides for better coordination of financial activities and simplified financial procedures.  A centralized finance department is particularly necessary in larger municipalities.

A decentralized municipal finance activity exists when the fiscal responsibilities are shared by a number of departments or officials.  For example, the Tax Collector may be fully responsible for his or her office while reporting directly to the Mayor, Manager or Business Administrator or other chief administrative officer (C.A.O.).  The same would hold true for the Treasurer, who may or may not be the Chief Financial Officer.

Each municipality is required to have a C. F. O. and that individual may not be a member of the Governing Body.

Regardless of the type of local finance organization, it must be understood that finance is a staff activity.  The Finance Officer continually advises the Mayor, Governing Body, Manager, Administrator, and departments on financial matters.  He or she plays an important role in helping to define a community's fiscal policy and in providing services to operating departments.

A.    MUNICIPAL CHIEF FINANCIAL OFFICER 10/1/11

      Generally, the Chief Financial Officer (C.F.O.) is the Director of Finance, Municipal Comptroller or Treasurer who is not a member of the municipal Governing Body. A designation of Certified Municipal Finance Officer (C.M.F.O.) is required for permanent appointment. Reference should be made to N.J.S.A. 40A:9-140.1 and 40A:9-140.2.

      The C.F.O. is responsible for the preparation of the Annual Financial Statement, Annual Debt Statement and Balance Sheet. The C.F.O. is also responsible for all general financial matters such as budget execution, bond issuance, investments, and revenue analysis. The person holding this position also prepares the official municipal budget based on spending decisions made by the Business Administrator, Manager, Mayor, and ultimately the Governing Body. The position of Comptroller is used to denote the C.F.O. in the town form of government (and in some cities). The functions are similar to the C.F.O. in other forms of government, including budget control and all other general fiscal functions.

      Although the C.F.O. may continue, in many municipalities, to have the title of Treasurer, their responsibilities include such differing activities as capital budgeting, inventory control, and salary and benefit costing for collective bargaining negotiations. The C.F.O. may also assist the Administrator of Manager in streamlining procedures and making departmental operations more efficient.

B.    MUNICIPAL TAX COLLECTOR [N.J.S.A. 40A:9-142]   10/1/07

      The Tax Collector is appointed by the Municipal Governing Body for a four (4) year term beginning January 1st. Subsequent appointments are made by the Governing Body or Chief Executive as appropriate to the form of government. The office of the Municipal Tax Collector and Chief Financial Officer or Municipal Clerk may be held by the same person. However, no member of the municipal Governing Body may hold any of these positions.

      The primary responsibilities of a Municipal Tax Collector include:

1.    Receive and collect all moneys assessed or raised by taxation or assessment for any purpose;

2.    Tax Collector must prepare monthly reports to the Governing Body on all receipts, deposits, and cash on hand belonging to the municipality.   10/1/07

C.    MUNICIPAL TAX ASSESSOR [N.J.S.A. 40A:9-148]   10/1/07

      Each county has a Board of Taxation, which directly supervises, on behalf of the Division of Taxation, the local Tax Assessor and the assessing process. The County Board of Taxation has the responsibility, pursuant to N.J.S.A. 54:3-13, to assure the value of all taxable property bears its "full, equal and joint share of taxes."

      The primary functions of the Municipal Tax Assessor include:

1.    Ascertaining the names of the owners of all real property situated in the Assessor's taxing district.

2.    After examination and inquiry, determining the full and fair value of each parcel of real property at such price as, in the assessor's judgment, it would sell at a fair and bona fide sale by private contract, on October 1 next preceding the date on which the assessment was completed.

 

 

II.         STATE SUPERVISION AND REQUIREMENTS (Including the Budget Manual)  9/15/10

 

To ensure compliance with the Local Budget Law (N.J.S.A. 40A:4-1 et. seq.) the Division of Local Government Services issues a budget manual which serves as a guide for municipal officials in preparing their budgets. The manual contains the budget calendar, information on appropriations and revenues, and instructions pertaining to other aspects of the budget.

In addition to the budget manual, the DLGS also annually issues uniform budget forms which prescribe the format of annual appropriations and accounts for all municipalities, counties, and local public authorities.

 

 

III.        ACCOUNTING SYSTEM   10/1/07; 9/15/10

 

Every organization, whether a profit-making business or a government agency, must have an adequate accounting system for recording financial transactions. The purpose of an accounting system is to record all financial transactions including income, expenses and the status of assets, liabilities, and equity, or in the case of municipalities - fund balance. These accounts must be self-balancing, that is assets must equal liabilities together with fund balance.   10/1/07

Prior to examining the specific nature of municipal accounting it is important to consider that two related financial systems play an important role in the efficiency and accuracy of municipal accounting systems. The first is the budgeting system which records expenditure of funds against legally made appropriations. The second is the accounts receivable system where money owed the municipality by taxpayers, state agencies, and municipal departmental agencies, among others, is recorded. The most important aspect of the accounts receivable system is the property tax collection system. The tax collection system is responsible for the billing and receiving of property taxes. The two systems are critical for keeping track of the expenditure and receipt of funds and are the basis for the "original books of entry" used to collate transactions into the accounting system.

The New Jersey Division of Local Government Services - Department of Community Affairs together with the Local Finance Board establishes accounting principles and practices, to be followed by New Jersey municipalities with N.J.S.A. 40A:2,4,5, and 11 as the statutory foundation.

A.    FUND STRUCTURE   10/1/07

      The fund structure is a set of self-balancing accounts that provides for the separate reporting of income and expenditures by type of function or operation of the organization. The following is a description of the funds used by New Jersey municipalities:

1.    Current Fund - This is the general fund of a municipality for the current year. Included as income are property tax collections and anticipated revenues.

2.    General Capital Fund - All "general" capital improvements, equipment acquisition (only bondable items), and facility acquisition or major facility improvements not attributed to the Current or Utility Funds are recorded in the general capital funds. Income received to support general capital spending is derived from either budgetary appropriations or duly and legally approved bond ordinances.

3.    Trust Fund(s) - Records specific receipts that may be used solely for the purpose for which they are intended. An example would be the "dog license" trust fund that allows for the receipt and disbursement of dog license revenues.

4.    Dedication of Revenues by Rider - Dedication by Rider resolution adopted pursuant to N.J.S.A. 40A:4-39 is a request to the Director to approve in the budget of a local unit dedicated revenues anticipated to be received during the fiscal year, which are not subject to a reasonably accurate estimate in advance. Upon approval, the Rider by title is annexed to the operating budget of the current year and subsequent year, as riders are deemed to have an indefinite life to continue their function until rescinded by any respective governing body. Thus, a non-lapsing revolving fund must be set up, in a separate Trust Fund to accomplish the purposes of the dedicated revenue provided that cash is on hand for the expenditure to be made. There must be statutory or regulatory law authorizing the purpose of a dedicated by Rider Trust Fund.   10/31/04

5.    Utility Operating and Capital Funds - These funds account for the operation and acquisition of capital facilities of municipal owned and operated utilities. The most common types of utilities are water, sewer and swimming pool utilities, although utilities may also be established for other purposes. Income is derived from user fees based upon consumption or other reliable measurement of utility use by customers. Expenditures are recorded against budget appropriations. Utility capital acquisition is recorded as part of the utility capital fund.

6.    Grant Fund 9/15/12

B.    BASIS OF ACCOUNTING   10/1/07

      In general, current fund revenues are recorded on a "cash basis," that is in the year the cash is received. When revenue accounts receivable are established they are offset by a "reserve for revenue accounts receivable" and are realized in cash in the succeeding year(s) when payment is made. However, utility funds utilize an accrual accounting whereby interfund receivables are not offset by a reserve for receivables.

C.    CHART OF ACCOUNTS   10/1/07

      Every fund (current, utility, capital, etc.) must contain an identification of all accounts and such accounts must be classified according to assets, liabilities, reserves, and fund balance (surplus). Each municipality must maintain a written chart of accounts that identifies each account.

      The DLGS promulgated a Flexible Chart of Accounts to provide a standardized method of budget reporting which may ultimately lead to a standardized method of reporting fund and trial balance account information.  In the future, the use of the FCOA will help facilitate electronic filing of budgets and financial statements.       

      The Flexible Chart of Accounts (FCOA) recommended for use by municipalities and counties in New Jersey is described in the FCOA manual. A thirteen-digit account code is used to identify all accounts included in the financial records of the locality.  The account code sequence of thirteen digits is used to identify the level of the financial account as follows:

Digit             Level of Account

XX                Fund (current, general capital, etc.)

XXX              General Ledger/Trial Balance Account (asset accounts, liability accounts, fund balance, etc.)

XX                Appropriation/NJCAFR – General Ledger and Budget Category (Budget Categories and Comprehensive Annual Financial Report account categories such as anticipated revenue)

XXX              Subsidiary Accounts for Revenue and Appropriation/Expenditure Reporting (miscellaneous revenues, budget expenditures including department appropriation, trust fund reserve accounts, etc.)

XXX              Detail Line Items (salaries and wages and other expenses budget categories). Due to the diverse needs of municipalities there will be a need for some municipalities and counties to design their own unique coding sequence. As such the accounts recommended in this manual may be modified locally.

      The difference between assets and liabilities (when total liabilities includes the reserve for receivables) is fund balance. This is commonly referred to as the accounting equation. Additionally, fund balance is often referred to as surplus.

D.   GENERAL FIXED ASSETS

      There is also a "general fixed asset account group" which records the value of fixed assets at original cost. Fixed assets are land, buildings, vehicular equipment, and general equipment owned by the municipality, except for utility owned assets. All fixed assets with a cost in excess of five thousand dollars ($5,000) individually, must be recorded in the fixed asset account group. The purpose of the account group is to record the investment by a municipality in fixed assets.

      Municipalities are initially required to perform an inventory to account for the fixed assets. Thereafter the changes in fixed assets, such as sales of equipment or acquisition of property must be recorded. Additionally, a description of the asset including acquisition date, cost, etc. should be recorded.

E.    GENERAL LEDGER

      The general ledger is the official financial permanent record of the municipality that contains a summary of all financial transactions as recorded on the original books of entry (i.e. budget, cash disbursements register, cash receipts register, etc.). The general ledger contains the funds, accounts and transactions in "double-entry" form; that is utilizing the debit and credit system of accounting. Accordingly, each fund included in the general ledger will be self-balancing and will be used to prepare the annual financial statements, determine the financial position of the municipality, and provide an audit trail for testing compliance with laws and regulations.

F.    FINANCIAL CONTROLS   10/1/07

      Cash receipts should be recorded by date, category of revenue, amount, and payee as well as other pertinent information. This type of information is contained on the source documents, such as an invoice, cash receipt forms, check stubs, etc.

 

 

IV.         ESSENTIALS OF BUDGET PREPARATION  9/15/10

 

      Because of the importance of the municipal budget, every effort should be made to provide for a systematic approach to budget preparation. The following are some general guidelines which will assist municipal officials in achieving such an approach.

A.    It is suggested that a budget calendar, supplementing the one provided by the DLGS be established. Such a calendar would set dates by which local officials and other agencies are required to submit their budget estimates. It is important that such deadlines be scheduled early in the year, with department requests being submitted by November 15th, so that budget preparation can begin early. This will allow adequate time for the preparation of budget requests and for effective review. Dates should also be established for department hearings by the Chief Administrative Officer or the Governing Body.

B.    Standard budget forms should be prepared for use by the various departments and agencies. These forms, accompanied by instructions, should be made available to all officials responsible for preparing budget requests. The forms will provide uniformity by which requests are presented and will clearly pinpoint the type of information which should be submitted. Provision should be made on the forms for the justification of all budget requests. These forms will also provide the supplemental budget detail that State regulation requires be made available to interested citizens upon request.

1.    Comparative fiscal data should be made available to the department. This would include prior and current year expenditures and personnel information such as the number of positions authorized and filled, salary ranges, and job specifications. Information on the prices of equipment and supplies and potential price increases or decreases should also be made available.

2.    Meetings should be held with the individual responsible for budget preparation, in order to answer any questions regarding the use of the forms and to discuss overall budget policy.

3.    If possible, the Mayor, Administrator, or Manager should establish guidelines regarding the budget policy to be established for the budget year. Such guidelines should define any limitations on new and expanded programs, the creation of new positions, or other budgetary restrictions. They should set forth the policy on wage increases and employee benefits and the financing of capital items.

4.    Operating officials such as department heads and agency directors should be instructed to identify work programs and to develop work load data. Wherever possible, performance data should be supplied to support budget requests. Services that are funded by the municipality or county should be allocated resources on the basis of the scope of activities. Realistic units of measurement should be developed wherever possible.

5.    Goals for services should be developed and stated in units of time and accomplishment expedited by the Governing Body.

C.    REVENUES

      An essential part of municipal budget is the revenue section which indicates the amount of revenues anticipated including property tax collections for the budget year. The individual responsible for preparing the municipal budget should carefully analyze all previous year receipts. The annual financial statement contains information on revenues, appropriations, surplus, tax collections, deferred charges, capital improvement fund, and debt service as well as other pertinent financial information.

      In preparing the revenue section of the budget, it must be remembered that municipal revenues may not normally be anticipated above the amount collected the previous year for each type of revenue. The major revenue items in the budget include:

- anticipated revenues;   10/1/07

- surplus;

- state aid;   10/1/07

- grants;   10/1/07

- miscellaneous revenues;

- delinquent taxes;

- and current taxes.

 

The amount of anticipated revenues is subtracted from the amount of appropriations for the budget year with the difference being the amount to be raised by taxation.

 

 

V.          MUNICIPAL BUDGET 9/15/10

 

The Director of the Division of Local Government Services within the Department of Community Affairs (hereafter referred to as "Director") and the policy-making Local Finance Board possess very broad powers over local government finance.  The Local Budget Law [N.J.S.A. 40A:4-1 et seq.] deals with state regulation of local budget matters.

This chapter provides an overview of the fundamental regulations pertaining to the budget process as it relates to the Municipal Clerk.  Working hand in hand with the Municipal Financial Officer, the Municipal Clerk is responsible for the advertisement, execution and filing of the budget resolution as well as any other resolutions and ordinances amending the budget.  Most of the documents submitted to the Division by a municipality are required by statute to have the proper certification of the Municipal Clerk in order to be considered legal.

The primary purpose of the official budget is to provide an orderly system of financial control.  It is the basis for limitations and controls on local government financial operations.  New Jersey statutes mandate a "cash basis" budget; that is, every municipality must budget sufficient income (revenue) to meet the total authorized expenditures (appropriations).

Every public entity accounting system has as its foundation the annual budget. As previously mentioned the budget system is an integral part of the accounting system of a municipality and is used to control and monitor expenditures made against duly and legally made appropriations. Additionally, budget revenue sources must be similarly controlled and monitored. 10/31/04

Although the main focus of budgeting is on setting appropriations, there is the revenue aspect of the budget as well.  Various revenues (eg. franchise and gross receipts taxes, construction fees and permits, federal and state grants, etc.) are examined and estimated for the ensuing budget.  These revenues are used to support spending.

The difference between the total appropriations and revenues represents the amount to be raised through taxation for municipal purposes.  Adoption of the budget constitutes the legal authorization to levy taxes and to spend funds.  These taxes shall be assessed and levied by the municipality. The municipality collects taxes for the school boards (local and regional), all county taxes, special districts, as well as municipal taxes.  10/1/07

A.    TEMPORARY BUDGET APPROPRIATIONS

1.    ADOPTION OF TEMPORARY BUDGET - Since the official budget for the fiscal year is not adopted prior to the beginning of the year, a temporary budget must be adopted covering the first quarter of the fiscal year.

a.    Provides for the period between the beginning of the fiscal year and the adoption of the budget.  Municipalities cannot make any commitments or payments prior to the adoption of a temporary budget.

b.    Adopted by resolution within the first thirty (30) days of the budget year.  It may be amended by resolution up to and including the 30th day of the month.

c.    Requires the affirmative vote of a majority of the full membership of the Governing Body.

d.    Shall not exceed twenty-six and twenty-five one hundredths percent (26.25%) of the total appropriations made in the budget for the preceding fiscal year (excluding certain exceptions).  The Director may permit additional temporary budget appropriations where budget dates are extended.

2.    EMERGENCY TEMPORARY APPROPRIATIONS [N.J.S.A. 40A:4-20] - In addition to the ordinary temporary appropriations required for the day-to-day operation, emergency temporary appropriations can be made, for lawful purposes, for the period between the beginning of the budget year and the date of the adoption of the budget (which may extend beyond the first quarter of the fiscal year).  The amount must be included by amendment under the current fiscal year budget as finally adopted.

a.    Resolution is adopted by a two-thirds (2/3rds) vote of the full membership of the Governing Body and filed with the Director.

b.    If adopted after the introduction and approval of the budget, it shall be included by amendment in the budget.  See Section VIII of this Chapter.   10/1/07

 

 

VI.         OFFICIAL BUDGET DOCUMENT   10/1/07; 9/15/10

 

The Official Budget document is provided by the Division of Local Government Services. The document outlines the revenues and appropriations for the municipality's fiscal year as approved by the Governing Body.

Sheet 1 requires the Municipal Clerk, Chief Financial Officer and Municipal Auditor to sign certifications that budget was approved by resolution of the Governing Body, is an exact copy of the original filed in the Municipal Clerk's Office, that all statements contained in the budget document are proof and the total of anticipated revenues equals to the total appropriations and the budget is in full compliance with the Local Budget Law.

In addition, once the budget is adopted the Director of the Division of Local Government Services certifies the adopted budget.

Sheet 2 is the Municipal Budget Notice. The Municipal Clerk must insert the recorded vote of the introduction of the budget and the adoption of the budget. In addition the municipal budget notice includes the name of the paper and date the budget notice was published in the official newspaper as well as the date and location of the public hearing.

Sheet 3 and 3A is the Explanatory Statement. The budget must contain an explanatory statement and consist of a tabulation of all anticipated revenues and appropriations to be made. The total of anticipated revenues must equal the total of appropriations (known as a "balanced budget"). A mandatory minimum budget message must include a summary of how the CAP was calculated and a summary, by function, of the appropriations that are spread among more than one (1) official line item.   10/31/04

Sheet 4 through Sheet 11 list the anticipated revenues.

Sheet 12 through 30 list the appropriations. Certain appropriations are within the CAP and others are excluded from the CAP. The appropriations will show each individual departments Salary and Wages appropriation and total other expenses.

 

 

VII.       ANNUAL BUDGET CALENDAR   12/01; 10/1/07; 9/15/10

 

A.    CALENDAR FISCAL YEAR (CY) - January 1 through December 31.  Municipalities with a population of less than 35,000 generally follow this calendar.  10/31/04

B.    STATE FISCAL YEAR (SFY or FY) - July 1 through June 30 10/31/04

1.    Municipalities with a population of over 35,000; or

2.    Any municipality which, by ordinance, adopts a state fiscal year.

3.    Any municipality may apply to the Local Finance Board for approval to convert to the State fiscal year, and the Board shall approve the conversion if it finds it is in the interest of the taxpayers of the municipality to change. Any municipality whose fiscal year is changed pursuant to this section shall prepare a transition budget to cover the period between January 1 and June 30 prior to the beginning of its first State fiscal year. A municipality may also apply to the Local Finance Board to revert back to a calendar year from a State fiscal year. In this case, they would do a transition Budget from July through December. 10/31/04; 10/31/05; 10/1/11

Note: The original statute creating the State Fiscal Year Budget Calendar for municipalities required that all municipalities with a population in excess of 35,000 adopt the State Fiscal Year Calendar. Later amendments permit any municipality to adopt the State Fiscal Year Calendar or to revert to the Calendar Year Budget Calendar. 9/15/14

 

 

VIII.     BUDGET PROCEDURE   10/1/07; 9/15/10

 

A.    INTRODUCTION AND APPROVAL - While the budget is referred to as a budget resolution, it requires two (2) readings, similar to an ordinance.  All budgets must be approved, or amended and adopted by resolution.  Each resolution must be passed by not less than a majority of the full membership of the Governing Body.

1.    Not later than February 10 (CY) or August 10 (FY), in writing, at a public meeting of the Governing Body. 10/31/04

2.    Constitutes a first reading which may be by title.

3.    The date, time and place of the public hearing is fixed by the Governing Body. 9/15/09

4.    Within three (3) days, three (3) certified copies of the approved budget are submitted to the Director, together with the Governing Body’s certification that the local unit’s hiring practices comply with the “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964,” as amended, 42 U.S.C. § 2000 et seq. (Apr. 25, 2012). [N.J.S.A. 40A:4-5]   10/1/07; 9/15/17

      SEE PL2017, C183

B.    EXTENSION OF DATES FOR INTRODUCTION AND APPROVAL - The Director, with the approval of the Local Finance Board, can extend the dates for introduction, approval and adoption of municipal budget beyond the dates required under the "Local Budget Law."

C.    ADVERTISEMENT

1.    Must be published in the official newspaper of the municipality at least ten (10) days before the date of public hearing.

2.    Can be advertised in full or by publication of a summary. 

3.    Must include the date, time and place of the public hearing.

D.   PUBLIC HEARING

1.    Shall be held not less than twenty-eight (28) days after the approval/introduction of the budget.

2.    May be adjourned from time to time until the hearing is closed.

3.    Budget must be read in full unless:

a.    At least one (1) week prior to the date of the hearing, and at the hearing, a complete copy of the approved budget shall be made available for public inspection. [N.J.S.A. 40A:4-8]   12/01; 10/31/05; 9/15/15

b.    Shall be made available to each person upon request.  9/15/15

c.    A resolution is passed by a majority of the full membership stating that the law has been met and allowing that the budget be read by title.  9/15/15

E.    AMENDMENTS – If required by the Director, amendments can be made prior to the public hearing without advertisement.  The Governing Body may make amendments only during or after the public hearing of the approved budget. 12/99; 9/15/15

1.    Requires a public hearing if the amendment:

a.    Adds a new item of appropriation in an amount in excess of one percent (1%) of the total amount of appropriations indicated in the approved budget;  9/15/15

b.    Increases the amount to be raised by taxes by more than 5%, unless the same is made to include an emergency temporary appropriation only.  9/15/15

c.    Increases or decreases any item of appropriation by more than ten percent (10%), or  9/15/15

d.    The amendment resolution must be advertised at least three (3) days before the fixed date for the public hearing.  The advertisement must be in full.  10/31/04; 10/1/07; 10/1/11; 9/15/12; 9/15/15

2.    Within three (3) days of adoption, three (3) certified copies of the amendment resolution must be submitted to the Director.   10/1/07

3.    Amending resolution must be read in full at the hearing and before adoption. Adoption requires a majority of full membership vote.   10/1/07

4.    The Director must approve and certify the amending resolution before its adoption unless the municipality is eligible and qualifies for local budget examination. 9/15/11

F.    ADOPTION - No budget or amendment can be adopted until the Director has certified approval unless the municipality is eligible and qualifies for local budget examination. 9/15/11

1.    Budget resolution must be read in full unless:

a.    At least one (1) week before the hearing and at the hearing, a complete copy of the approved budget:  [N.J.S.A. 40A:4-8] 10/31/04; 9/15/16

(1)    Shall be made available for public inspection, and  9/15/16

(2)    Shall be made available to each person upon request, and  9/15/16

b.    A resolution is passed by a majority of the full membership allowing that the budget be read by title.  9/15/16

2.    No later than March 20 (CY) or September 20 (FY).  If the Director's certification is received after the public hearing, the Governing Body may adopt within ten (10) days after receipt.   10/31/04

3.    By resolution adopted by a majority of the full membership of the Governing Body.

4.    Within three (3) days after adoption, three (3) certified copies are to be sent to the Director.  All signatures must be manual, all votes recorded. [N.J.S.A. 4-10]   10/1/07

5.    Within fifteen (15) days after adoption, one (1) certified copy is sent to the County Board of Taxation. [N.J.S.A. 40A:4-11]   10/31/07; 10/1/07

G.   SELF-EXAMINATION OF BUDGET   10/31/04

1.    The Local Budget Law -N.J.S.A. 40A:4-78(b) and rules adopted by the Local Finance Board permit certain municipalities in sound fiscal condition to assume the responsibility, normally granted the Director of the Division of Local Government Services, of conducting the annual budget examination. In examining local budgets, the DLGS reviews the revenue estimates to determine that they are reasonable, accurate, and correctly stated and determines that items of appropriation are properly set forth, adequate provisions for debt service, deferred charges, statutory expenditures, cash deficit of preceding years, and reserve for uncollected taxes. This same analysis must be performed by the CFO and Governing Body when performing a self-examination of the budget. 

a.    The Director of Local Government Services also has the authority to approve the insertion of any special item of revenue in the budget.

b.    The director also examines the budget for accuracy of itemization and for compliance with the Local Budget Law and the regulations of the DLGS. The division cannot change the amount of an appropriation unless an amount is legally required.

H.    MUNICIPAL LEVY CAP LAW – Municipalities are prohibited from increasing their final appropriation by more than two percent (2%). Exempt are municipalities with a tax rate of $0.10 or less per $100 of assessed valuation. (Limitation on Increase in Appropriations) [N.J.S.A. 40A:4-45.3] 9/15/08; 10/1/11; 9/15/17

I.    ANNUAL COST-OF-LIVING ADJUSTMENT (COLA) – is authorized under the original 1977 budget cap law.  Current law affecting municipal and County budgets required compliance with both the “1977” cap law and the 2010 levy cap law.  Pursuant to N.J.S.A. 40A:4-45.2, “municipalities shall be prohibited from increasing their final appropriations by more than 2.5%...” unless action is taken by the Governing Body to increase their final appropriations subject to the cap to the statutorily permitted 3.5%.  A model ordinance is available on the Division of Local Governments website.

      *Editor's Note: Refer to official communications (Local Finance notices) as to the current CAP.

1.    Exceptions may be subtracted from the budget amount when calculating the rate of increase.  Exemptions from this calculation often change from year to year. A complete listing of exceptions is noted in N.J.S.A. 40A:4-5.3, however, a few are listed below:

a.    Increase in pension.

b.    Debt service.

c.    Increase in health insurance.

d.    Emergency appropriations.

9/15/17; 9/15/18

 

 

IX.         CAPITAL BUDGET   10/1/07; 9/15/10

 

A.    Included in the budget document, a plan for the expenditure of public funds for capital purposes for a period not greater than six (6) years. Municipalities with a population under 10,000 only need a three (3) year capital plan. 12/99; 10/1/11

B.    Only after the adoption of a capital budget can the Governing Body expend or incur obligations for capital purposes.

C.    May be amended at any time during the year.

 

 

X.          COST OF LIVING ADJUSTMENT (COLA), [N.J.S.A. 4-45.1a]  10/1/07; 9/15/10; 10/1/11

 

Defined as the annual percentage increase in the Implicit Price Deflator for State and Local government Purchases of Goods and Services for the year preceding the current year.  The Director determines the COLA to be applied. 9/15/12

A.    FUND STRUCTURE   10/1/07

      The fund structure is a set of self-balancing accounts that provides for the separate reporting of income and expenditures by type of function or operation of the organization. The following is a description of the funds used by New Jersey municipalities:

1.    Current Fund - This is the general fund of a municipality for the current year. Included as income are property tax collections and anticipated revenues.

2.    General Capital Fund - All "general" capital improvements, equipment acquisition (only bondable items), and facility acquisition or major facility improvements not attributed to the Current or Utility Funds are recorded in the general capital funds. Income received to support general capital spending is derived from either budgetary appropriations or duly and legally approved bond ordinances.

3.    Trust Fund(s) - Records specific receipts that may be used solely for the purpose for which they are intended. An example would be the "dog license" trust fund that allows for the receipt and disbursement of dog license revenues.

4.    Dedication of Revenues by Rider - Dedication by Rider resolution adopted pursuant to N.J.S.A. 40A:4-39 is a request to the Director to approve in the budget of a local unit dedicated revenues anticipated to be received during the fiscal year, which are not subject to a reasonably accurate estimate in advance. Upon approval, the Rider by title is annexed to the operating budget of the current year and subsequent year, as riders are deemed to have an indefinite life to continue their function until rescinded by any respective governing body. Thus, a non-lapsing revolving fund must be set up, in a separate Trust Fund to accomplish the purposes of the dedicated revenue provided that cash is on hand for the expenditure to be made. There must be statutory or regulatory law authorizing the purpose of a dedicated by Rider Trust Fund.   10/31/04

5.    Utility Operating and Capital Funds - These funds account for the operation and acquisition of capital facilities of municipal owned and operated utilities. The most common types of utilities are water, sewer, stormwater and swimming pool utilities, although utilities may also be established for other purposes. Income is derived from user fees based upon consumption or other reliable measurement of utility use by customers. Expenditures are recorded against budget appropriations. Utility capital acquisition is recorded as part of the utility capital fund. 9/15/19

6.    Grant Fund 9/15/12

 

 

XI.         REFERENDUM TO EXCEED LIMITATIONS  10/1/07; 9/15/10

 

          A referendum can be conducted by a municipality requesting approval for increasing the municipal budget by more than two percent (2%).  A resolution authorizing such a referendum is required.

 

 

XII.       BUDGET ADJUSTMENTS   10/1/07; 9/15/10

 

A.    APPROPRIATION TRANSFERS

1.    During the last two (2) months of the current budget fiscal year, by a resolution adopted by a two-thirds (2/3) vote of the full membership.  Funds are transferred from one line item to another. [N.J.S.A. 40A:4-58]  10/31/04

2.    During the first three (3) months of a succeeding year, by a resolution adopted by a two-thirds (2/3) vote of the full membership.  (Although the fiscal year has ended, some funds remain which are called "reserves."  These appropriation reserves can be transferred from one line item to another within that budget through this process.) [N.J.S.A. 40A:4-59]  10/31/04

3.    The exception to N.J.S.A. 40A:4-58 and N.J.S.A. 40A:4-59 is that no transfers may be made from an appropriation outside the CAP to an appropriation within the CAP. Also, no transfers shall be made among outside CAP appropriations except transfers may be made among debt service appropriations only. [N.J.S.A. 40A:4-38]  10/31/04

B.    UNEXPENDED BALANCES  10/31/05; 9/15/09

1.    May be cancelled prior to the end of the fiscal year by resolution of the Governing Body.

2.    Automatically cancelled at the end of the next succeeding fiscal year. These funds go into fund balance (surplus) when cancelled.   10/1/07

 

 

XIII.     AMENDMENTS AFTER ADOPTION OF THE BUDGET 10/31/05; 10/1/07; 9/15/10

 

A.    EMERGENCY APPROPRIATIONS - Made for an unforeseen purpose after the adoption of a budget. To meet a need to protect or promote the public health, safety, morals or welfare. The total amount of all emergency appropriations shall be included in the budget of the next succeeding fiscal year.

1.    Regular Emergency Appropriations [N.J.S.A. 40A:4-48]

a.    If the amount is less than three percent (3%) of the appropriations in the current budget, a resolution can be adopted by not less than two-thirds (2/3rds) of the full membership of the Governing Body that an emergency exists. (See Exhibits for Sample Resolution - Emergency Appropriations/less than three percent (3%)).  9/15/09; 9/15/17

(1)    Two (2) certified copies of the resolution are submitted to the Director for approval.

(2)    Affidavit of Chief Financial Officer as required by N.J.S.A. 40A:4-52.

(3)    See Exhibits for Sample Resolution - Emergency Appropriations less three percent (3%). 10/1/07; 9/15/17

b.    If the amount exceeds more than three percent (3%) of the appropriations in the current budget, the Governing Body must petition the Director for permission to exceed the limitation of three percent (3%). A resolution adopted by a two-thirds (2/3rds) vote of its full membership is required. (See Sample Resolution - Emergency Appropriations more than three percent (3%)). 9/15/09

(1)    Two (2) copies of the resolution are to be filed with the Director.

(2)    Affidavit of Chief Financial Officer as required by N.J.S.A. 40A:4-52.

(3)    See Exhibits for Sample Resolution - Emergency Appropriations more than three percent (3%). 9/15/17

2.    Special Emergency Appropriations [N.J.S.A. 4A:4-53]

a.    Authorized by the adoption of an ordinance, by a two-thirds (2/3rds) vote of the full membership, for the repair, reconstruction of streets, road or bridges, or other property damaged by flood or hurricane. See Exhibits for Sample Ordinance - Special Emergency.

b.    For the specific reasons listed below:

(1)    Preparation of an approved tax map.

(2)    Preparation and execution of a revaluation.

(3)    Revision and codification of ordinances.

(4)    Preparation of a master plan.

(5)    Preparation of drainage maps for flood control purposes.

(6)    Preliminary engineering studies and planning necessary for installation and construction of a sanitary sewer system.

(7)    Authorized expenses of a consolidation commission established pursuant to "Municipal Consolidation Act."

(8)    Contractually required severance liabilities resulting from layoff or retirement of employees when the total liability is in excess of ten percent (10%) of the amount to be raised by taxes for municipal purposes in the fiscal year such layoffs or retirements take place.

(9)    Preparation of a sanitary or storm system map.

A copy of all ordinances as adopted relating to special emergency appropriations shall be filed with the Director.   10/1/07

 

c.    Special Emergency Appropriations can be paid off over the next five (5) years.   10/1/07

B.    SPECIAL ITEMS OF REVENUE AND APPROPRIATIONS [N.J.S.A. 40A:4-87]

1.    During the course of the fiscal year, funds may become available which were not anticipated at the time of the adoption of the budget. The Director may approve the insertion of these revenues, making the item of revenue available for expenditure. At the same time, the Director may approve the insertion of an appropriation item of equal amount to offset the revenues (also known as Chapter 159). The Chief Financial Officer files the required certifications with the Director. See Exhibits for Sample Resolution - Special Items of Revenue and Appropriations.

Helpful tip: See reference material LFN 2013-07; New Jersey Department of Community Affairs, Division of Local Government Services; 9/15/14 http://www.nj.gov/dca/divisions/dlgs/resources/local_fin_notices.html

a.    Is filed electronically by the Chief Financial Officer with the Division of Local Government Services.    9/15/06; 9/15/12; 9/15/14; 9/15/17

b.    Resolution must be approved by the Governing Body. 9/15/14

C.    CHANGE OF TITLE, TEXT OR AMOUNT OF APPROPRIATION [N.J.S.A. 40A:4-85]

      The Director may change the title, text or amount of an appropriation in the adopted budget only to make the appropriation available for the specific purpose required.

1.    It may not be used as a means of making revisions to the budget during the year.

2.    Two (2) copies of the resolution must be filed with the Director for approval. See Exhibits for Sample Resolution - Change of Title, Text or Amount of Appropriation.

 

 

XIV.      SELF-LIQUIDATING MUNICIPAL UTILITIES 9/15/10

 

A.    OVERVIEW   10/1/07

      A municipal utility is an agency created to perform a specific function (or functions) within a municipality, county or region. The utility is required by law to be self-financing. If it is not, the deficit must be appropriated in the general municipal budget of the subsequent year. Excess revenue (surplus) may be transferred to the municipal budget if the Director of the Division of Local Government Services (DLGS) consents.

      Utility operations are separate and distinct from the local unit (municipality or county). However, they are not autonomous since the budget and operations are the responsibility of the elected Governing Body and its management.

B.    DEFINITION   10/1/07

Self-Liquidating Definition (N.J.S.A. 40A:2-45)

      The self-liquidating purpose is met if cash receipts from fees, rents or other charges in a fiscal year are sufficient to meet operating costs, maintenance costs, and interest and debt redemption charges payable or accruing in such year.

C.    UTILITY BUDGET   10/1/07

      It is important to note that utilities that provide service to customers in an adjacent municipality are subject to control by the State Board of Public Utilities. Utility rates are subject to BPU approval and financial records must be kept according to BPU regulations.

 

 

XV.        SPECIAL DISTRICTS 9/15/10

 

A.    OVERVIEW

      Special districts are independent governmental entities created within a local municipal unit to provide specific functions, with power to tax, impose service charges and incur debt. They are autonomous, and their officials are usually elected, rather than appointed.

B.    FIRE DISTRICTS   10/1/07

      Fire districts may be staffed by volunteers, paid firefighters or a combination thereof, are financed by annual property taxes, may be aided by a statutory limited appropriation from the municipal government's budget and may sell bond anticipation notes and/or serial bonds for capital improvements.

      Fire District Budget, similar to the municipal budget, must be introduced in writing, subject to a public hearing, and made available for the public. Unlike a municipal budget, the Fire District budget must be approved by the voters at the Fire District elections.

      If the voters reject the Fire District Budget:

1.    The Governing Body of the municipality shall publish notice of a public hearing, conduct a public hearing and, by resolution of a majority of its full membership fix an annual budget for the fire district.

2.    The Governing Body shall certify the amount to be raised by taxation to the Assessor of the Municipality and shall transmit copies of the approved budget to the Director of the Division of Local Government Services and the Board of Fire Commissioners.   10/1/07

TIP BOX:  Annually DLGS publishes a Local Finance Notice providing both Fire Budget Instructions and a Budget Calendar, as well as Fire District Budget Excel Workbook and Word Documents as a reference guide and to keep the documents used up to date. 9/15/19

 

C.    SPECIAL IMPROVEMENT DISTRICT (District Management Corporation)   10/1/07

      The Special Improvement District's (SID) annual budget must be approved by the Municipal Governing Body following notice, advertisement and public hearing. The SID must file its annual audit with the Municipal Governing Body and with DLGS and make an annual report of activities to the Municipal Governing Body within thirty (30) days after the end of the fiscal year.

 

 

XVI.      SCHOOL FINANCES 9/15/10; 10/1/11

A.    GENERAL INFORMATION:

1.    The largest portion of local property taxes statewide goes for school purposes.

2.    In Type I school districts, certain school debts are included in the municipal budget.

3.    Outstanding school debt is reported on the "annual debt statement" for which the Certified Municipal Financial Officer is responsible. 9/15/17

4.    School districts may use part of the municipal borrowing margin, (with the approval of the local finance board) to finance school capital projects.

5.    The school district may cooperate with the municipality in a variety of ways such as cooperative purchasing and shared services.

6.    The Municipal Governing Body must review defeated school budgets and recommend reductions in current or capital outlay appropriations.

7.    Title 18A of the New Jersey Statutes Annotated in the statutory authority, and N.J.A.C. Title 6 the Administrative Code governing public schools in New Jersey.   10/1/07

B.   BUDGET TIMETABLE   10/1/07; 9/15/12

      (Only applies to school budgets that are still voted on in April)

Annual Election10/31/05        Annual school election in all Districts - third Tuesday in April except when adjusted by the Commissioner of Education because the date coincides with a period of religious observance(18A:14-2 as amended).

 

          

C.    DEFEATED SCHOOL BUDGETS [N.J.S.A. 18A:22-37 to 38]

1.    If the voters reject any of the items submitted at the annual school election, the Board of Education shall deliver the proposed school budget to the Governing Body of the municipality, or of each of the municipalities included in the district, within two (2) days thereafter.

2.    The Governing Body of the municipality/municipalities, after consultation with the Board of Education and by May 19th, determine the amount which, in the judgment of the Governing Body/Governing Bodies, is necessary to be appropriated for each item appearing in the school budget and certify to the County Board of Taxation the totals of the amount so determined to be necessary for each of the following:

a.    General fund expenses of schools; or

b.    Appropriations to capital reserve account.

3.    Within fifteen (15) days after the Governing Body of the municipality/municipalities shall make certification to the County Board of Taxation, the Board of Education shall notify the Governing Body/Bodies if it intends to appeal to the State Commissioner of Education the amount which the Governing Body/Governing Bodies determined to be necessary to be appropriated for each item appearing in the proposed school budget.

4.    If the Governing Body/Bodies fail to certify any amount determined to be necessary for any item rejected at the annual school election, or in the event that the different Governing Bodies certify different amounts, the State Commissioner of Education shall determine the amount to be appropriated, and the amounts shall be included in the taxes to be assessed, levied and collected in the municipality/ municipalities for those purposes.  (Board of Education, East Brunswick Township v. Township Council, East Brunswick, 48 N.J. 94, 2    10/31/05

5.    The Governing Body must submit a detailed explanation of any reductions made to the Board of Education budget, to the Board. Within fifteen (15) days after the Governing Body makes such a certification, the Board of Education shall notify such Governing Body if it intends to appeal the reduction to the Commissioner.

6.    If the Board of Education does appeal the decision of the Governing Body,  it must notify the Commissioner, by petition (N.J.A.C. 6:24-1.2), which starts the legal proceedings wherein the Office of Administrative Law holds hearings, takes briefs and generally determines the facts of the case (N.J.A.C. 6:24-1.10). The administrative law judge then issues an opinion and findings as to the reasonableness of the cuts.

D.   SCHOOL APPROPRIATIONS AND TAX LEVY

      Both the revenue and appropriation sections of the school budget are divided into the following parts for purposes of property tax levy certification: current expenses (operations); vocational evening schools or classes; evening schools or classes for foreign-born residents; capital reserve fund or any capital project to be financed from property taxes; and debt service. There is no direct annual vote on school debt service since the indebtedness has been previously approved. The school budget must be in balance where income and appropriations are the same. Income may include both current income and available free balances (commonly referred to as surplus).

      There is a major difference between municipal and school budgeting requirements with regard to the handling of appropriation balances and surplus. If there is a free balance in any school district appropriation, any portion of the amount may be expended by resolution of the Board without it being included in a subsequent budget. Additionally, budget amounts may be over-expended providing that the overall budget remains in a surplus (balance) position.

      On the other hand, Municipal Budget Laws do not permit over-expenditures of appropriations, even if there is surplus. The municipality's surplus can be used only if included in an annual budget, while school balances not appropriated for budget expenditures may be included as income. Accordingly, a school district has the flexibility of either spending free balances or including it as surplus income in subsequent budgets.

      The School Board Secretary certifies the amount of school taxes, through the Municipal Clerk, to the County Board of Taxation, which includes the levy on the annual county abstract of ratables.

      Pursuant to N.J.S.A. 54:4-76, school taxes must be paid first from local tax collections, the dates which these payments are due is set forth in N.J.S.A. 54:4-75.

      The school tax levy is certified on either a fiscal year or a calendar year basis. In a school district operating on a fiscal year basis, the full amount of taxes necessary to run the schools in 1989-90 would be levied in 1989. If the district were on a calendar year basis, approximately one-half (1/2) of the tax requirements for 1988-89 and one-half (1/2) of the tax needed for 1989-90 would be levied in 1989.

 

 

 

XVII.    UNIFORM SHARED SERVICES AND CONSOLIDATION ACT  [N.J.S.A. 40A:65-1] 10/1/07; 9/15/10; 10/1/11; 9/15/19

 

A.    INTENT OF LEGISLATION

      The intent of the legislation is to facilitate and promote interlocal and regional service agreements.  The grant of power under this act is intended to be as broad as is consistent with general law relating to local government. 

B.    PARTIES ELIGIBLE TO PARTICIPATE

1.    Any local unit (a municipality, county, school district authority subject to the Local Authorities Fiscal Control Law, or a regional authority or district) of that State may enter into a contract with any other local unit or units for the joint provision within their several jurisdictions of any service, including services incidental to the primary purposes of the local unit (any of the powers, duties and functions exercised or performed by a local unit by or pursuant to law) which any party to the agreement is empowered to render within its own jurisdiction.  12/00

2.    An authority subject to the Local Authorities Fiscal Control Law, and any other board, commission or district established by and within a single local unit and providing service within such local unit or part thereof may become a party with the consent of the Governing Body of the local unit. 12/00

a.    Consent can be given by resolution.

b.    After consent given, such authority, board, commission or district may enter into such contract by resolution without need of publication or hearing. 12/00

C.    PROCEDURE FOR ADOPTION 

1.    Resolution required.

2.    Resolution need not set forth the terms of the contract in full but shall clearly identify it by reference.

3.    Agreement must be filed and open to public inspection of the local unit immediately upon adoption.  12/02

4.    Agreement shall take effect upon adoption of resolutions by all parties thereto.

D.   SERVICES ELIGIBLE

1.    Any service or aspect of service which any of the participants may legally perform for itself, including but not limited to:

a.    General government administration

b.    Health, police and fire protection

c.    Code Enforcement

d.    Tax Assessment and Collection

e.    Financial Administration

f.    Environmental services

g.    Joint municipal courts, youth, senior citizens, welfare and social services programs

2.    Required State agencies approvals are not amended or repealed by this statute.

3.    In the case of a contract for the joint provision of services by an officer or employee of a municipality who is required to comply with State certification requirements as a condition of employment, the contract shall provide the payment of a salary to the officer or employee and shall designate one of the municipalities as the primary employer of the officer or employee for the purpose of that person's tenure rights.  12/00

E.    CONTENTS OF AGREEMENT  

1.    The contract shall specify:

a.    Exact nature and extent of the services to be performed jointly or by one or more of the parties as agent for the other party or parties.

b.    Measurable standards of the level, quality and scope of such performance, with specific assignment and allocation of responsibility for meeting such standards.

c.    Estimated cost of such services through the duration, allocation to the parties in dollar amounts or by formula, time schedule for periodic payment, provisions for periodic modifications of estimates or formulas if necessary.

d.    Duration of the contract which shall be seven (7) years unless otherwise agreed upon by the parties.

e.    Procedure for payments.

2.    The contract may provide for binding arbitration or fact finding procedures to settle disputes.

3.    Party performing service is the general agent for all parties and shall have:

a.    Full powers of performance and maintenance and full powers to undertake any ancillary operation reasonably necessary or convenient to carry out its duties.

b.    Powers of enforcement and administrative regulations which are or may be exercised by the part on whose behalf it acts, except as limited by the terms of the contract.

c.    No party shall be liable for any part or share of the cost of acquiring, constructing or maintaining any capital facility except as permitted by the terms of the contract or amendment thereto.

4.    Any party may enter into another contract or contracts with any other eligible parties for the performance of any services or services except as explicitly provided, and participation in one such contract shall not bar participation with the same or other parties in any other contract.

F.    CONTRACTS FOR LAW ENFORCEMENT SERVICES 

1.    Shall recognize and preserve the seniority, tenure, pension rights of full time law enforcement officers in the local units who are in good standing at the time the contract is adopted.

2.    No law enforcement officer shall be terminated except for cause, however, the state does not prevent or prohibit the merged entity from reducing the force as provided by law for reasons of economy and efficiency.

3.    May provide for appointment of a chief law enforcement officer.  In such cases, the contract shall provide that any person who is serving as the chief law enforcement officer in one of the participating local units at the time the contract is adopted may elect either:

a.    To accept a demotion of not more than one rank without any loss of seniority rights, impairment of tenure or pension rights; or

b.    To retire from service.  If the person elects retirement, the statute sets forth retention of rank and provision of leave with full compensation and benefits. 

c.    If the local units have adopted Civil Service Statutes, the position of chief law enforcement officer shall be in the career service.

G.   PAYMENTS 

1.    Shall be made in accordance with the Contract.

2.    In case of a dispute, the full amount is to be paid, but if through subsequent negotiation, arbitration or litigation the amount due shall be determined, agreed or adjudicated to be less, the party having received the payment shall forthwith repay the excess.

H.    COMPLIANCE WITH LOCAL PUBLIC CONTRACTS LAW 

      If the contract involves the use of services of a private contractor, such party shall be required to award the contract for the work to be performed by the private contractor in accordance with the Local Public Contracts Law.

I.    AUTHORITIES SUBJECT TO "LOCAL AUTHORITIES FISCAL CONTROL LAW"

      If services to be provided to an authority subject to the Local Authorities Fiscal Control Law equal one-half (1/) or more of the total costs of the services being performed by that immediately prior to the contract, the contract shall require approval by resolution of the Governing Body of each local unit which created such authority.   12/00

 

 

XVIII.   LOCAL FISCAL AFFAIRS LAW  [N.J.S.A. 40A:5 et seq.]   10/1/07; 9/15/10

 

A.    ANNUAL AUDIT [N.J.S.A. 40A:5-4]   10/31/05; 10/1/07

1.    Requirements

a.    Must be completed within six (6) months after close of fiscal year.

b.    Must be prepared by Registered Municipal Accountant.

c.    Must cover complete fiscal year. - "Fiscal year"  period for which a local unit adopts a budget.

2.    Report of Audit [N.J.S.A. 40A:5-6]   10/31/05; 10/1/07

a.    Duties of Registered Municipal Accountant

(1)    Must file the original report with the Municipal Clerk.

(2)    Must file a certified duplicate copy of the report with the Director of Local Government Services. 

(3)    It should be noted that the Local Auditor (Registered Municipal Accountant) is required to audit all Federal and State grants as part of the local audit under the single audit guidelines. Federal and State grants are changing in importance as major sources of local revenue. Municipal Officers have a responsibility to become familiar with the categories of grants, their eligibility requirements, and the municipality's financial ability to comply with all rules and regulations appertaining thereto. 10/31/04

b.    Duties of the Municipal Clerk - Distribute Audit to Governing Body

(1)    Within thirty (30) days of receipt of the audit report, must publish the Synopsis of the audit, together with the recommendations made by the Registered Municipal Accountant, at least once in the official newspaper as designated by the municipality. [N.J.S.A. 40A:5-7]   10/1/07

(2)    Failure of the Municipal Clerk to publish within thirty (30) days after receipt shall subject the Municipal Clerk to a fine of ten dollars ($10.00) for each day after the expiration of the thirty (30) days that such publication fails to appear, payable to the local unit.

(3)    Upon receipt of notice from Director of Local Government Services that audit report has been filed, the Governing Body must, within forty-five (45) days of receipt of the audit, pass a resolution stating they have reviewed, at a minimum, the report entitled Schedule of Findings and Questioned Costs and General Comments and Recommendations of the Registered Municipal Accountant and sign a Group Affidavit as evidence.  9/15/15

(4)    Municipal Clerk must forward to the Director of the Division of Local Government Services the following:

(a)    "Proof of Publication" Affidavit from official newspaper.

(b)    Certified copy of resolution of Governing Body.

(c)    One originally signed Group Affidavit, duly notarized, containing the signatures of all members of the Governing Body holding office at the time of the passage of the resolution.  Second originally signed Group Affidavit remains on file with the Municipal Clerk. (See Group Affidavit Form Exhibit at the end of this chapter.)

3.    Corrective Action Plan

a.    Duties of Chief Financial Officer

(1)    Prepare Plan with assistance from other officials affected by the audit recommendations.

(2)    The Plan shall cover all findings and recommendations in the audit report.

b.    Duties of Municipal Clerk

(1)    Governing Body must pass resolution within sixty (60) days of receipt of audit that approves the Corrective Action Plan.

(2)    One (1) certified copy of approving resolution together with the Corrective Action Plan must be sent to the Director of the Division of Local Government Services.

 

c.    Corrective action plan should include:

(1)    Description of findings.

(2)    Analysis of why it occurred.

(3)    Action plan to correct.

(4)    Date of corrected action.

B.    ANNUAL FINANCIAL STATEMENT

1.    Definition

      A verified statement of the financial condition of the local unit as of the close of the fiscal year as required by N.J.S.A. 40A:5-12 prepared by the municipality's Chief Financial Officer or Auditor. 10/31/04

2.    Requirements

a.    Required to be filed annually with the Director of the Division of Local Government Services by Chief Financial Officer on forms furnished and prescribed by the Director. If the Statement is not filed within ten (10) days after the time fixed for filing, the Chief Financial Officer shall be subject to a penalty of five dollars ($5.) for each day of neglect to file the statement, in accordance with the Penalty Enforcement law. [N.J.S.A. 2A:58-1 et seq.]   10/1/07

b.    Calendar year municipalities must file no later than February 10; State fiscal year municipalities must file no later than August 10.

3.    Annual Financial Statements are also used to prepare the Balance Sheet of the municipality, which lists assets, liabilities and Fund Balance, and which is made part of the official Annual Budget. 10/31/04

4.    Municipalities must submit an annual financial statement, pursuant to DLGS requirements, containing trial balance for each fund, a cash reconciliation, a budget and property tax reconciliation, and other information required by DLGS. The annual audit also contains "audited" financial statements and supplementary information. 10/31/04

C.    ANNUAL DEBT STATEMENT   10/31/04

1.    Filed annually with the Municipal Clerk and electronically with the Director of the Division of Local Government Services by the Chief Financial Officer before the end of the first month of each fiscal year.  9/15/13

2.    Filing and processing of Supplementary Debt Statements are set forth in Chapter 9, Bond Ordinances, of this Study Guide.

D.   LEGAL DEPOSITORIES FOR PUBLIC MONEYS

1.    Cash Management Plan

a.    Includes designation of depositories for public funds.

b.    Requires the investment of public funds in interest bearing accounts.

2.    Deposit of Funds  12/02

      All moneys, including moneys collected by taxation, received from any source by or on behalf of the local unit or any board or department thereof, shall, within forty-eight (48) hours after the receipt thereof:

a.    Be paid to the officer charged with the custody of the general funds of the local unit who shall deposit all such funds within forty-eight (48) hours after the receipt thereof to the credit of the local unit in its designated legal depository, or

b.    Be deposited to the credit of the local unit in its designated legal depository.

E.    PAYMENT OF MONEYS OF LOCAL UNIT

1.    Requirements for payment by Governing Body

a.    A detailed bill of items, certified as to its correctness by the party claiming payment, must be presented.

b.    A certification by an officer or duly designated employee of the local unit having knowledge of the facts that the goods have been received by, or the services rendered to, the local unit must be included with the detailed bill.

2.    Payment of advances for travel expenses

a.    By resolution of the Governing Body, advances to specifically named officers and employees may be made for travel expenses incurred for authorized official travel.

b.    Within ten (10) days after the completion of the travel for which an advance was made, the officer or employee must submit a detailed bill of expended funds which includes verification of items, and must repay any excess of the advanced funds.

F.    APPROVAL AND PAYMENT OF CLAIMS

1.    Approval of claims

a.    The Governing Body shall approve or disapprove all claims.

b.    By ordinance, an approval officer may be designated with the title of Certifying and Approval Officer and specifying the maximum dollar amount for which payment may be approved without prior approval of the Governing Body.

2.    Payment of claims

a.    An ordinance may be adopted that provides a method of disbursing moneys or payment of approved claims.

b.    If there is no ordinance as mentioned in paragraph 1b. above, then payment is made by check drawn on the municipality, signed by the Mayor or other Chief Executive Officer and the Municipal Clerk and countersigned by such other officer or officers as are designated by ordinance. 10/31/04

3.    Public recording of approved claims

a.    All claims approved for payment by the local unit shall be recorded in its minutes.

b.    The record of approval shall be open to the public.

 

G.   OFFICERS TO DELIVER FUNDS AND RECORDS WHEN TERM EXPIRES

1.    On the day of the expiration of his term of office, an official who ceases to hold office shall deliver to the Municipal Clerk, or other person who may be so designated by the Governing Body, all moneys, papers, books, memoranda, accounts and any data of any nature pertaining to his office.

2.    On failure or refusal to comply with the above requirement within five (5) days after the expiration of his term, on notice in writing from the chief executive officer of such delinquency, he shall be subject to a penalty of fifty dollars ($50.) for each day of refusal or neglect to comply, payable to the local unit.

H.    PETTY CASH FUND OF LOCAL UNIT

1.    May be established by a local unit upon written application to and approval received from the Director of the Division of Local Government Services.

2.    Requests for increases in amounts of petty cash funds must be made via resolution of the Governing Body to the Director of the Division of Local Government Services.

I.    OATHS OF OFFICE 10/1/11

1.    The oaths shall be filed with the Municipal Clerk and shall be preserved as a public record.

 

 

 

EXHIBIT LOCAL BUDGET VOTE, FILING & TIME INFORMATION

 

 

ITEM

FILED WITH DLGS

VOTE REQUIRED

WHEN MAY/MUST BE DONE

 

Temporary Budget

No

Majority of Full Membership

First 30 days of beginning of fiscal year

(not to exceed 26.25% of the total appropriations made in preceding year)

 

Emergency Temporary Budget 40A:4-20

Yes

2/3 Full Membership

Between beginning of budget year and adoption of budget

Budget Introductions 40A:4-5

Yes - certified copies within 3 days

Majority of Full Membership

Calendar Year Budget: By February 10th Fiscal Year Budget: By August 10th

(publish in full or in summary, 10 days prior to hearing; copy available in library one week prior to hearing; 28 days must elapse between introduction and hearing)

Budget Amendment 40A:4-9

Yes - certified copies within 3 days

Majority of Full Membership

 

(may only be made during or after advertised public hearing has been held on the approved budget; publish in full or in summary at least three days prior to hearing; must be read in full at the hearing and before adoption)

Budget Amendment 40A:4-10

Yes - certified copies within 3 days

Majority of Full Membership

 

Calendar Year Budget: By March 20th Fiscal Year Budget: By September 20th

Adopted Budget to County Board of Taxation 40A:4-11

 

 

Within 15 days of adoption

Regular Emergencies 40A:48

Yes - 2 certified copies

2/3 Full Membership

 

Special Emergencies 40A:4-53

Yes - 2 certified copies

2/3 Full Membership

 

Special Item of Revenue 40A:4-87 One copy is marked "filed and returned

Yes - 2 certified copies with backup documentation

Majority of Members Present

 

Change of Title, Text or Amount 40A:4-85

Yes - 2 certified copies

Majority of Members Present

 

Appropriation Transfers 40A:4-58

No

2/3 Full Membership

Last two months of budget year

Appropriation Transfers Reserves 40A:4-59

No

2/3 Full Membership

First three months of budget year

 

 

 

EXHIBIT  BUDGET PUBLICATION BY SUMMARY FORM

[N.J.S.A. 40A:4-6.1]

The Governing Body of a municipality or county may satisfy the advertisement requirements for the introduction and passage of a budget in the following manner:

The publication of a summary pursuant to N.J.S.A. 40A:4-6 citing:

The totals of the major sections of the budget, including but not limited to, operating expenses, capital improvement appropriations, salaries and wages, and surplus for the previous and current budget years;

The amount of any principal and interest of any debt to be paid in the current budget year and the total amount of debt remaining;

The total number of persons employed in the previous budget year and the total number estimated to be employed in the current budget year, the municipal purposes property tax levy of the previous budget year and the estimated municipal purposes property tax levy of the current budget year, the total amount to be raised by taxation and the total amount to be received from other sources in the current budget year, and the total appropriations of the previous year's budget and of the current year's budget; and

The location, phone number and office hours of the principal municipal or county building where copies of the budget will be available to the public and the name of the person or the office to be contacted if a person wants to receive a copy of the budget by mail.

The name of the municipality or county and the budget title shall be printed in bold 16 point typeface, and the remainder of the summary shall be printed in bold 8 point typeface.

Attorney General Opinions issued in response to questions on publication by summary:

Publication of the budget meets the requirement of "official advertising" and is eligible for the rates for official advertising.

Despite the required 16 and 8 point typeface required, charges for publication must be based on the number of six point lines (type size) the ad takes up, times the number of eight pica wide (measurement of line width) segments utilized.

 

 

 

EXHIBIT GOVERNING BODY APPROVAL OF LOCAL BUDGET EXAMINATION

 (insert name and county of municipality, fiscal year, and name of Governing Body as appropriate)

WHEREAS, pursuant to N.J.S.A. 40A:4-78b, the Local Finance Board has adopted rules that permit municipalities in sound fiscal condition to assume the responsibility, normally granted to the Director of the Division of Local Government Services, of conducting the annual budget examination; and

WHEREAS, pursuant to N.J.A.C. 5:30-7.2 through 5:30-7.5 the (insert name of municipality) has been declared eligible to participate in the program by the Division of Local Government Services, and the Chief Financial Officer has determined that the (insert name of municipality) meets the necessary conditions to participate in the program for the (insert fiscal year);

NOW, THEREFORE, BE IT RESOLVED by the (insert name of Governing Body) of the (insert name and county of municipality) that, in accordance with N.J.A.C. 5:30-7.6a & b, and based upon the Chief Financial Officer's certification, the (insert name of Governing Body) has found the budget and has met the following requirements:

That with reference to the following items, the amounts have been calculated, pursuant to law, and appropriated as such in the budget:

Payment of interest and debt redemption charges;

Deferred charges and statutory expenditures;

Cash deficit of preceding year;

Reserve for uncollected taxes;

Other reserves and non-disbursement items; and

Any inclusions of amounts required for school purposes.

That the provisions relating to limitation on increases of appropriations, pursuant to N.J.S.A. 40A:4-45.2, and appropriations for exceptions to limits on appropriations found at N.J.S.A. 40A:4-45.3 et seq. (complies with the "cap" law) are fully met.

That the budget is in such form, arrangement, and content as required by the Local Budget Law and N.J.A.C. 5:30-4 and 5:30-5.

That pursuant to the Local Budget Law:

All estimates of revenue are reasonable, accurate and correctly stated;

Items of appropriation are properly set forth; and

In itemization, form, arrangement, and content, the budget will permit the exercise of the comptroller function within the municipality.

The budget and associated amendments have been introduced and publicly advertised, in accordance with the relevant provisions of the Local Budget Law, except that failure to meet the deadlines of N.J.S.A. 40A:4-5 shall not prevent such certification.

That all other applicable statutory requirements have been fulfilled.

BE IT FURTHER RESOLVED that a copy of this resolution be forwarded to the Director of the Division of Local Government Services.

 

 

 

EXHIBIT  STATE FISCAL YEAR MODEL CAP ORDINANCE

 

WHEREAS, the Local Government Cap Law, N.J.S.A. 40A:4-45 et seq., provides that in the preparation of its annual budget, a municipality shall limit any increase in said budget to five percent (5%) or the index rate, whichever is less, over the previous year's final appropriations, subject to certain exceptions; and

WHEREAS, P.L. 1986, c. 203 amended the Local Government Cap Law, to provide that a municipality may, in any year in which the index rate is less than five percent (5%), increase its final appropriations by a percentage rate greater than the index rate but not to exceed the five percent (5%) rate as defined in the amendatory law, when authorized by ordinance; and 

WHEREAS, the index rate for State Fiscal Year (insert year) has been certified by the Director of the Division of Local Government Services in the Department of Community Affairs as (insert current year index); and

WHEREAS, the (insert name of Governing Body) of the (insert name and county of municipality) finds it advisable and necessary to increase its SFY (insert year) budget by more than (insert current year index) over the previous year's final appropriations, in the interest of promoting the health, safety and welfare of the citizens; and

WHEREAS, the (insert name of Governing Body) hereby determines that a (insert rate of increase) percent increase in the budget for said year amounting to (insert dollar increase) in excess of the increase in final appropriations otherwise permitted by the Local Government Cap Law, is advisable and necessary.

NOW, THEREFORE, BE IT ORDAINED by the (insert name of Governing Body) of the (insert name and county of municipality), a majority of the full authorized membership of this Governing Body affirmatively concurring that, in the SFY (insert year) budget year, the final appropriations of the (insert name of municipality) shall, in accordance with this ordinance and P.L. 1986, C.203 be increased by (insert rate of increase) percent, amounting to (insert dollar increase), and that the SFY (insert year) municipal budget for the (insert name of municipality) be approved and adopted in accordance with this ordinance; and

BE IT FURTHER ORDAINED that a certified copy of this ordinance as introduced be filed with the Director of the Division of Local Government Services within five (5) days of introduction; and

BE IT FURTHER ORDAINED, that a certified copy of this ordinance upon adoption, with the recorded vote included thereon, be filed with said Director within five (5) days after such adoption.

 

 

 

EXHIBIT  RESOLUTION - EMERGENCY APPROPRIATIONS LESS THAN 3 PERCENT TOTAL OPERATING APPROPRIATIONS

 

WHEREAS, an emergency has arisen with respect to (insert reason or condition in full), and no adequate provision was made in the 20__ budget for the aforesaid purpose, and N.J.S. 40A:4-46 provides for the creation of an emergency appropriation for the purpose above mentioned; and

WHEREAS, the total amount of emergency appropriations created including the appropriation to be created by this resolution is                        $_________

and three percent of the total operating appropriations in the budget for 20__ is $_________ and

 

WHEREAS, the foregoing appropriation, together with prior appropriations, does not exceed three percent of the total current operating appropriations (including utility operating appropriations) in the budget for 20__;

NOW, THEREFORE, BE IT RESOLVED by the (insert name of Governing Body) of the (insert name and county of municipality) (not less than two-thirds of all the members thereof affirmatively concurring) that in accordance with N.J.S. 40A:4-48:

1.       An emergency appropriation be and the same is hereby made for (insert title of appropriation designated as to salaries and wages and/or other expenses) in the amount of

$_____________

2.       That said emergency appropriation shall be provided for in full in the 20__ budget and is requested to be excluded from CAPS pursuant to N.J.S. 40A:4-45.3.c(1).

3.       That an "Emergency Note" not in excess of the above amount be authorized pursuant to N.J.S. 40A:4-48 and in accordance with the provisions of N.J.S. 40A:4-51.

4.       That such note shall be executed by the (insert name and title of Financial Officer) and by the (insert name and title of "such other officer")

5.       That said note shall be dated _______________________, 20__, may be renewed from time to time, and such note and any renewals thereof shall be payable on or before December 31, 20__ (insert further detail, i.e. place of payment, etc.)

6.       That two certified copies of this resolution be filed with the Director of Local Government Services.

NOTE:  OMIT 3, 4 AND 5 IF EMERGENCY NOTES ARE NOT AUTHORIZED.

 

 

 

EXHIBIT  RESOLUTION - EMERGENCY APPROPRIATIONS MORE THAN 3 PERCENT TOTAL OPERATING APPROPRIATIONS

 

WHEREAS, an emergency has arisen with respect to (insert reason or condition in full), and no adequate provision was made in the 20__ budget for the aforesaid purpose, and N.J.S. 40A:4-46 provides for the creation of an emergency appropriation for the purpose above mentioned; and

WHEREAS, the total amount of emergency appropriations created including the appropriation to be created by this resolution is                                                    $____________

and three percent of the total operating appropriations in the budget for 20___ is $_________ and

WHEREAS, the foregoing appropriation, together with prior appropriations, exceeds three percent (3%) of the total current operating appropriations (including utility operating appropriations) in the budget for 20__;

NOW, THEREFORE, BE IT RESOLVED by the (insert name of Governing Body) of the (insert name and county of municipality) (not less than two-thirds (2/3) of all the members thereof affirmatively concurring) that in accordance with N.J.S. 40A:4-49, petition be made to the Director of Local Government Services for permission to exceed the statutory limitation of three percent (3%) for the creation of an appropriation for the purpose set forth in the preamble hereof in accordance with the following:

1.       An emergency appropriation be and the same is hereby made for (insert title of appropriation designated as to salaries and wages and/or other expenses) in the amount of

                                                                                   $_____________

2.       That said emergency appropriation shall be provided for in full in the 20__ budget and is requested to be excluded from CAPS pursuant to N.J.S. 40A:4-45.3.c(1).

3.       That an "Emergency Note" not in excess of the above amount be authorized pursuant to N.J.S. 40A:4-48 and in accordance with the provisions of N.J.S. 40A:4-51.

4.       That such note shall be executed by the (insert name and title of Financial Officer) and by the (insert name and title of "such other officer")

5.       That said note shall be dated _______________________, 20__, may be renewed from time to time, and such note and any renewals thereof shall be payable on or before December 31, 20__ (insert further detail, i.e. place of payment, etc.)

6.       That two certified copies of this resolution be filed with the Director of Local Government Services.

NOTE:     OMIT 3, 4 AND 5 IF EMERGENCY NOTES ARE NOT AUTHORIZED.

 

 

 

EXHIBIT  ORDINANCE - SPECIAL EMERGENCY

 

WHEREAS, it has been found necessary to make an Emergency Appropriation to meet certain extraordinary expenses incurred, or to be incurred, by reason of damage caused by (insert purpose), and

 

WHEREAS, N.J.S. 40A_____ provides that it shall be lawful to make such appropriation, which appropriation and/or the "special emergency notes" issued to finance the same shall be provided for in succeeding annual budgets by the inclusion of an appropriation of at least one-fifth or one-third of the amount authorized pursuant to this act.

 

NOW, THEREFORE, BE IT ORDAINED by the (insert name of Governing Body) of the (insert name and county of municipality) (not less than two-thirds of all the members thereof affirmatively concurring) that in accordance with the provisions of N.J.S. 40A:4-55:

 

1.       An emergency appropriation be and the same is hereby made for (insert title of appropriation) in the total amount of                                                         $_____________

2.       That said emergency appropriation shall be provided for in full in the budgets of the next succeeding years by the inclusion of not less than $___________________(must be at least one-fifth of the total amount) in each of the next succeeding annual budgets.

3.       That an "Emergency Note" not in excess of the above amount authorized pursuant to law be provided.

4.       That such note shall be executed by the (insert name and title of Financial Officer) and by the (insert name and title of "such other officer")

5.       That said note shall be dated _______________________, 20__, may be renewed from time to time, and such note and any renewals thereof shall mature and be paid in the amount of not less than one-fifth or one-third of the total amount appropriated by this resolution in each year after the authorization thereof, (insert further detail, i.e. place of payment, etc.)

 

 

 

EXHIBIT  RESOLUTION - SPECIAL ITEMS OF REVENUE AND APPROPRIATION

 

WHEREAS, N.J.S.A. 40A:87 provides that the Director of the Division of Local Government Services may approve the insertion of any special item of revenue in the budget of any County or Municipality when such items shall have been made available by law and the amount thereof was not determined at the time of the adoption of the budget; and

 

WHEREAS, said Director may also approve the insertion of any item of appropriation for equal amount;

 

NOW, THEREFORE, BE IT RESOLVED that the (insert name of Governing Body) of the (insert name and county of municipality) hereby requests the Director of Local Government Services to approve the insertion of an item of revenue in the budget of the year 20__ in the sum of $________________, which item is now available as a revenue from the (insert source of revenue) in the amount of $_________________;

 

BE IT FURTHER RESOLVED that the like sum of $__________________ is hereby appropriated under the caption of "____________________________"; and

 

BE IT FURTHER RESOLVED that the above is a result of a (insert "State Grant of $_____________________ from _______________________________" or other source of revenue).

 

 

 

EXHIBIT  CERTIFICATION - GRANTS/SPECIAL ITEM OF REVENUE AND APPROPRIATION

 

STATE OF NEW JERSEY

DEPARTMENT OF COMMUNITY AFFAIRS

DIVISION OF LOCAL GOVERNMENT SERVICES

 

Pursuant to N.J.S.A. 40A:4-87, I hereby certify that the following resolution has been duly adopted by the Governing Body of:_______________________  

                              Name of Municipality

 

                                    ____________________________________

                                                            Municipal Clerk's signature

 

I hereby certify that (insert name of municipality) has realized or is in receipt of written notification of the state or federal monies cited in the following resolution, which meets all statutory requirements and will be included in the 20____ municipal budget.

 

                                                         ___________________________________

                                                                      Chief Financial Officer's Signature

Resolution Number:__________

Date of Adoption: __________

 

Revenue Title:___________________________________ Amount:$______________

 

Appropriation Title:_______________________________  Amount:$______________

 

Local Match-Source:______________________________  Amount:$______________

 

Approval is hereby given to the cited resolution adopted by the Governing Body pursuant to N.J.S.A. 40A:4-87

 

Director, Division of Local Government Services

 

by:__________________________________________

Duly Appointed Designee     FOR DCA USE ONLY

 

                                                                                    Municode:___________

THIS CERTIFICATION FORM MAY BE REPRODUCED                                              

TO BE USED FOR STATE AND FEDERAL GRANTS ONLY            Doc. No.:___________

 

 

 

EXHIBIT  RESOLUTION - CHANGE OF TITLE, TEXT OR AMOUNT OF APPROPRIATION

 

WHEREAS, N.J.S.A. 40A:4-85 provides that the Director of the Division of Local Finance may, at the request of, or with the consent of, the Governing Body of the County or Municipality, make such correction of the title, text or amount of any appropriation appearing in the budgets as may be necessary to make said item of appropriation available for the purpose or purposes required for the needs of any such County or Municipality;

 

NOW, THEREFORE, BE IT RESOLVED that in accordance with the provisions of N.J.S.A. 40A:4-85, that the (insert name of Governing Body) of the (insert name and county of municipality) hereby requests the Director of the Division of Local Finance to make the following corrections in the budget of (insert year):

 

FROM: (Insert name of account)                                         (insert amount)

 

TO:     (Insert name of account)                                         (insert amount)

 

BE IT FURTHER RESOLVED that the foregoing correction is, in the opinion of the Governing Body, warranted and authorized by the Statute above referred to, and is necessary for the orderly operation of the (insert name and county of municipality) for the reasons hereinabove set forth.

 

 

 

EXHIBIT SAMPLE RESOLUTION - SCHOOL BOARD BUDGET RESOLUTION CERTIFYING THE GENERAL FUND TAX LEVY FOR THE (MUNICIPALITY) BOARD OF EDUCATION FOR THE SCHOOL YEAR (YEARS), BY THE GOVERNING BODY OF THE (MUNICIPALITY)(COUNTY), STATE OF NEW JERSEY

 

WHEREAS, the voters of the (Municipality) in a duly held election, did fail to approve the General Fund Tax Levy Budget of the Board of Education of the (Municipality) for the school year (years); and

 

WHEREAS, the Education, Budgets and Appropriations Law, N.J.S.A. 28a-22-37, requires the Governing Body of the (Municipality), after consultation with the (Municipality) Board of Education, to determine the amount which is necessary to be appropriated in such budget and to certify to the County Board of Taxation the total amount so determined; and

 

WHEREAS,  the Governing Body of the (Municipality) has consulted with representatives of the (Municipality) Board of Education, and has thereafter determined the amount necessary to be appropriated;

 

NOW, THEREFORE BE IT RESOLVED by the Governing Body of the (Municipality) (County), State of New Jersey, that the following determination is hereby made:

 

1.       The original tax levy on the ballot for the base budget:             $

 

2.       The amount of reduction to the tax levy for the base budget:     $

 

3.       The amount of tax levy being certified for the base budget:       $

 

4.       Specific line item reductions:

 

Account Number       Description              Amount

 

a.

b.

c.

 

5.       Supporting reasons for reduction:  Based upon a review of all data provided by the Board of Education, meetings with representatives of the Board of Education, numerous public hearings and consideration of the public need, it has been determined that the reductions set forth herein can be effectuated without a reduction in programs or negatively impacting upon the education of the students.

6.       The revised budget is sufficient to provide a thorough and efficient education.

7.       There was no additional general fund tax levy considered by the voters.

BE IT FURTHER RESOLVED that certified copies of this resolution be forwarded to the (Municipality) Board of Education, Superintendent of the (County) Department of Education, and the Administrator of the (County) Board of Taxation.

 

 

 

EXHIBIT CORRECTIVE ACTION PLANS - NEW REQUIREMENTS FOR LOCAL UNITS

 

LOCAL FINANCE NOTICE 92-15 - 7/8/92

Up until now, only those municipalities and counties receiving federal aid in excess of $25,000/year have been obligated to prepare Corrective Action Plans in accordance with the Single Audit Act, U.S. Office of Management and Budget Circular A-128, and New Jersey Office of Management and Budget Circular Letter 87-11.

In accord with the timetable set forth in this Notice, all local units (includes municipalities, counties, and fire districts and authorities operating under the Local Public Authorities Fiscal Control Act) must now prepare and submit a Corrective Action Plan as part of their annual audit process.

The Corrective Action Plan shall be prepared in accordance with the OMB circulars and this Notice. Plans are to be submitted to the Division and placed on file with the Clerk or Secretary of the local unit 60 days from the date the audit is received by the Governing Body.  A sample typical Corrective Action Plan item is attached.

The Plan shall cover all findings and recommendations in the audit report, including state, federal and general findings, as well as the status of all prior year findings and recommendations.  It should be prepared by the Chief Financial Officer of the local unit with assistance from other officials affected by the audit recommendations and approved by the Governing Body of the local unit.

Each Corrective Action Plan shall include the following for each finding:

a)       Description of the deficiency (finding, observation, questioned cost, etc.)

b)       Analysis of why the deficiency occurred

c)       Descriptions of procedures to be used to correct the deficiency or reason why the finding will not be corrected

d)       Expected date of implementation (which is required to be no later than six months after the date of the audit report)

Corrective Action Plans are to be referenced in the "synopsis" of the audit report that is published.  Suggested language for the audit synopsis is attached.

Local unit Governing Bodies should be aware of their audit due dates.  The Division urges Governing Body members to be aware of the auditor's responsibilities to have audits submitted on time.  Late submissions will not be tolerated and monetary fines may be imposed for late audits.  Authorities and fire districts are also reminded that a copy of their audit must be filed with the clerk of the government(s) that created them.

Audit Due Dates:

Municipal and County Audits are due no more than six (6) months from the close of the fiscal year.

Authority and Fire District audits are due four (4) months from the close of the         fiscal year.

In all cases a copy of the audit must be sent to the Division, and the synopsis published in a local newspaper, with a copy to the Division.

           SUGGESTED AUDIT SYNOPSIS LANGUAGE FOR CORRECTIVE ACTION PLANS

A Corrective Action Plan, which outlines actions the (insert name of local unit) will take to correct the findings listed above, will be prepared in accordance with federal and state requirements.  A copy of it will be placed on file and made available for public inspection in the Officer of the Municipal (or County) Clerk in (insert name of local unit) within 45 days of this notice.

 

 

 

EXHIBIT GROUP AFFIDAVIT FORM

 

 

NO PHOTOCOPIES OF SIGNATURES

 

GROUP AFFIDAVIT FORM

CERTIFICATION OF GOVERNING BODY

 

 

STATE OF NEW JERSEY)

                                            )SS.

COUNTY OF ______________)

 

 

          We, members of the governing body of the ________________ of _________________________, County of _____________, of full age, being duly sworn according to law, upon our oath depose and say:

 

1.     We are duly elected (or appointed) members of the ____________________ of the ___________ of _____________________.

(Insert name of governing body)

 

2.     In the performance of our duties, and pursuant to the Local Finance Board Regulations, we have familiarized ourselves with the contents of the Annual Municipal Audit filed with the Clerk pursuant to N.J.S.A. 40A:5-6 for the year ____________.

 

3.     We certify that we have personally reviewed and are familiar with, as a minimum, the section of the Annual Report entitled:

 

SCHEDULE OF FINDINGS AND RECOMMENDATIONS

OR

SCHEDULE OF FINDINGS AND QUESTIONED COSTS

 

                                          (L.S.)                                                (L.S.)

                                          (L.S.)                                                (L.S.)

                                          (L.S.)                                                (L.S.)

                                          (L.S.)                                                (L.S.)

                                          (L.S.)                                                (L.S.)

 

Sworn to and subscribed before

Me this ________________ day of

_________________________, 20_____.

______________________________________

Notary Public of New Jersey

The Municipal Clerk (or Clerk of the Board of Chosen Freeholders as the case may be) shall set forth the reason for the absence of signature of any members of the governing body.

IMPORTANT: This certification must be sent to the Division of Local Government Services, P.O. Box 803, Trenton, New Jersey 08625

 

 

CHAPTER 10 LOCAL BUDGET AND FISCAL AFFAIRS
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