Municipal Finance Administration Flashcards
Learn
What are the five types of local government?
- County
- Municipality
- School Districts
- Local Authorities
- Special Districts
How many counties are there in New Jersey?
Twenty-one (21)
How are counties classified?
Classified on the basis of size, geographical area, and population density
How many municipalities are there in New Jersey?
Five hundred sixty-five (565)
Four forms of local government
- Commission Act of 1911 (Walsh Act)
- Municipal Manager Act of 1923
- Optional Municipal Chart Law (Faulkner Act)
a. Council-Manager
b. Council-Mayor
c. “Small Municipalities” (pop. under 12,000) - Mayor-Council-Admin
What is a major source of revenue for local government?
Property Taxes
What is the Certified Municipal Finance Officer Certification Law
Chapter 110 of the Laws of 1988
What does PEERA stand for?
Public Employer-Employee Relations Act of 1968 (Collective Bargaining)
What are the primary functions of the Tax Collector?
- Receive & collect moneys assessed or raised by taxation or assessment
- Enter into the suitable books of accounts all receipts received in a day
- Deposit such public moneys in an authorized public depository
- Prepare monthly reports to the governing body
- Prepare & furnish a detailed list of all delinquent tax payers
- Conduct a tax sale of delinquent taxes
What are the primary functions of the Tax Assessor?
- Ascertain the names of owners of all real property
- Determine the full and fair value of each real property
- On or before Jan. 10, audit & determine the taxable valuations of each taxpayer
- Determine the taxable value of tangible personal property not used in business
- Compile a tax list and duplicate
What does the DLGS stand for?
Division of Local Government Services
Name the five major components of the DLGS?
- Bureau of Financial & Assistance
- Bureau of Local Management Services
- Bureau of Authority Regulation
- Office of Local Government Research
- Local Finance Board
What is the strongest power of the Local Finance Board?
The supervision of financial affairs of a municipality (strongest power of what division)
What is a budget?
A financial plan involving the estimate of expenditures and the proposed method of financing these expenditures through various revenue sources.
What must be done to a budget for there to be authority to spend or tax?
Adoption
Who has the authority to approve the insertion of any special item of revenue in a budget?
The Director of the DLGS
What is the statute for the insertion of any special item of revenue in the budget?
N.J.S.A. 40A:4-87
What is the insertion of any special item of revenue in the budget referred to as?
Chapter 159 Resolutions
What are the Essentials of Budget Preparations?
- Budget calendar
- Standard budget forms
- Comparative fiscal data
- Meetings should be held
- CEO should establish guidelines
- Identify work programs & develop work load data
What is the COLA rate ORDINANCE requirement?
When the COLA is less than or equal to 2.5%, a county or municipality can increase its allowable inside the cap spending to 3.5%
What does a county need to pass for a COLA Rate?
Resolution (COLA rate; type of gov’t)
What does a municipality need to pass for COLA Rate?
Ordinance (COLA rate; type of gov’t)
What does the tax levy cap law establish?
A new system of homestead credits to reduce property taxes
What is the local tax levy cap?
2% cap
What is the Fiscal Year Change Law?
Chapter 75, Public Laws of 1991
What does the Fiscal Year Change Law require?
Municipalities with a population in excess of 35,000, who receive Municipal Revitalization Program aid in 1990, change their fiscal year from Jan. 1 - Dec. 31 to the State Fiscal Year, July 1 - June 30
What does SW stand for?
Budget abbreviation for Salary and Wages
What does OE stand for?
Budget abbreviation for Other Expenses
What are the major items of revenue in the budget?
- Surplus
- Miscellaneous revenues
- Delinquent taxes
- Current taxes
A budget must be introduced no later than when?
February 10, unless an extension is determined by the DLGS
How many copies of the budget must be filed with the DLGS, and within how many days of introduction/approval?
3 certified copies within 3 days
What are the publication dates for a budget?
10 days prior to the public hearing and 28 days after introduction (approval)
When must a municipality adopt temporary appropriations by?
Jan 31.
Why does a municipality need to adopt temporary appropriations by January 31?
To cover commitments from the beginning of the fiscal year to the date of budget adoption, a municipality must do what, by when?
Temporary appropriations cannot exceed what percent?
26.25% of the total of all budget appropriations of the preceding year
What are the votes needed to approve a budget transfer resolution?
Two-third vote of the full governing body
Budget transfers cannot be done?
Outside the cap to inside the cap, or outside the cap to outside the cap
Emergency appropriations cannot exceed what percentage of the total of the current & utility operating appropriations?
3%
What are the program periods?
Population under 10,000 have a minimum program period of 3 years; Population over 10,000 have a minimum program period of 6 years
Who makes up the Municipal Bond Team?
Chief financial officer (CFO), bond counsel, financial advisor, municipal auditor, project engineer, architect
When can a bond ordinance only be adopted?
A capital budget (or temporary capital budget) has been adopted first
Does a capital budget amendment need to be advertised?
No
What is the Debt Limit?
3.5% of the average of the prior three years equalized assessed real property valuations
What does the Bond Law require?
The period of usefulness of a project to be finances by bonds must is at least 5 years
What must municipalities provide on a bond?
5% down payment
List the procedures for authorizing debt?
- Preparation of the “capital budget sections”
- Preparation of the supplemental debt statement (SDS)
- Other expenses: Section 20 Costs
- After adoption, ordinance is published in a paper & doesn’t take effect for 20 days (Estoppel Period)
Define Estoppal Period
The 20 days after the adoption of an ordinance before it takes effect
Another name for “Other Expenses”
Section 20 Costs
What are the responsibilities of the Municipal Clerk with Respect to the Issuance of Debt?
- Filing the Supplemental Debt Statement
- Introduction of bond ordinances at meetings
- Obtain affidavits of the newspaper publication of the ordinance
- Notify all persons affect by local improvement ordinances
- Publish the ordinance again after adoption
- Publishing the “notice of sale” in at least 2 newspapers at least 7 days prior to the sale which has been authorized by resolution
- Obtain and forward to the bond counsel specimens of the signature appearing on the bonds
- Sign & seal documents regarding the delivery of the bonds as requested by the CFO
- Notes must be manually executed by the clerk, and will be request to execute various closing documents in connection with the sale of notes
Define idle funds
The investment of funds to provide maximum return on cash balance
What is the formula for cash flow?
Open Cash Balance + Cash Receipts - Cash Disbursements
Types of securities and deposits municipalities can invest in
- U.S. Obligations
- Certificates of Deposit
- Statement Savings
- Bonds or other obligations of counties, municipalities & school districts
- Bonds of any Federal Intermediate Credit Bank
- The New Jersey Cash Management Fund
- Government Money Market funds
Idle funds should be deposited where?
Interest bearing accounts is where what should be deposited?
Who is responsible for making and being responsible for municipal deposits?
The CFO is authorized by governing body resolution
Local contracting units are required by the DLGS to maintain, what?
An encumbrance account system
What does a purchase manual do?
What sets forth the procedures used by the contracting unit?
Define the two types of purchasing types?
- Centralized - administered by a “purchasing agent”
- Decentralized - require the functional unit depts. to make a more active role in obtaining quotes, soliciting vendors, preparing bids, etc.
Define requisition
An internal form by which a user department initiates a request for purchase
What is the Bid Threshold?
$40,000 with a QPA, $17,500 without a QPA
What is the Quote Threshold?
15% of the local unit’s bid threshold; $6,000 with a QPA, $2,625 without a QPA
When is a BRC required?
Purchases that are over 15% of the local unit’s bid threshold
What is the purpose of formal bidding?
To promote competition
What is the price in which single purchases should be included as part of a town’s inventory of fixed assets?
$5,000
The Annual Audit is performed by who?
Registered Municipal Accountant or Certified Public Accountant
Define fund structure
A set of self-balancing accounts
Name the Funds used by NJ municipalities:
- Current fund (general operating nature)
- General capital fund
- Trust fund (records specific (i.e. animal control))
- Utility operating & capital funds (enterprise funds)
- State and federal grant funds
In double-entry bookkeeping, what must occur?
Debits and Credit should be equal
What are the basic elements on Internal Controls?
- Separation of duties
- Written procedure for reviewing transactions
- Written procedure to establish safeguards against duplicate payment of bills
- Prompt deposit of all funds within 48 hours of receipt
- Use of pre-numbered receipts and checks
- Preparation of a record of all cash receipts as soon as the cash is received
- Current and complete posting of all records
- Verification of the tax bills, collections & overpayments
- Prompt collection and accounting of all delinquent taxes, fees & assessments
- Prohibition against cashing employee checks
- Check the entries & calculations on timesheets, payroll & deductions registers
- Provision for inventory control of supplies and equipment
- Periodic surprise cash counts
What is the purpose of a single audit?
To avoid duplication in effort when separate audits are performed
Who must respond to the audit? How? With what?
The CFO must respond in writing, to each of the recommendations, by submitting to the DLGS a Corrective Action Plan
What are the Petty Cash Fund Limitations?
$500, with a maximum drawdown of $50 per individual purchase
Who performs school district audits?
Registered Municipal Account or a Certified Public Accountant with a School Auditor’s License
Who is responsible for the day-to-day administrative operations of the school district?
The Business Administrator
What are the reasons school finance is relevant to municipalities?
- The largest portion of the entire property tax bill goes for school purposes
- CFO, CTC, CMC may be appointed as treasurer of school monies
- Certain school finances are included in the municipal budget (type I)
- Outstanding school debt is reported on the “annual debt statement”
- School districts may use part of the municipal statutory debt limit
- School districts may cooperate with the municipality
- Municipal governing body must review defeated school budget
- A municipality can transfer its surplus funds to the schools
Who is appointed by the mayor in a Type I school district and elected by the voters in a Type II district?
The School Board
When must the adoption of the School Districts budget be done? Who must it be submitted to?
On or before January 15, it must be submitted to the County Superintendent
When is the publication for School District budget due?
7 days prior to the public hearing
When is the Public Hearing/Adoption of the School Budget?
First Tues. in March / March 18
When is the School Board Election?
First Tues. in April (Type II only)
What are the sections of the school budget:
- Current expenses (operations)
- Vocational evening school/classes
- Vocational evening school/classes for foreigners
- Capital reserve fund
- Debt service
Financial Disclosure Statements must include
- Source of income
- Source of fees
- Source of gifts
What does Pay-to-Play require?
- Businesses entities must submit a list of contributions made to elected officials
- Businesses awarded contracts in excess of $50,000 a year must file an annual disclosure of contributions statement with ELEC
Local authorities are considered what?
“Quasi-public”
How are self-liquidating municipalities created?
By ordinance
How are special districts created?
By petition, proposed ordinance for Local Finance Board approval
How are local authorities created?
Ordinance, Resolution, then Local Finance Board approval
