Acting State Comptroller Kevin Walsh suggested that the state might have to withhold aid from nine municipalities failing to comply with state law related to unused sick leave payouts and accrued vacation time for public employees.
In a letter sent to Gov. Phil Murphy, Senate President Nicholas Scutari, and Assembly Speaker Craig Coughlin, Walsh described how nine municipalities failed to work with the Office of State Comptroller to create corrective action plans.
Walsh gave the municipalities – which include Bridgewater, Hamilton (Mercer County), Pennsville Township, Piscataway Township, Red Bank, Rutherford, Sparta, Wantage, and West New York – 30 days before he would take further action to compel compliance.
In an update released today, the comptroller’s office lays out the problems with the nine municipalities, including their lack of compliance and shortcomings, and the steps they took to remedy the issues.
Bridgewater, Hamilton, Pennsville, Piscataway, Rutherford, Wantage, and West New York are the municipalities missing an independent fiscal assessment.
Those that submitted a corrective action plan without their governing body’s approval are Pennsville, Piscataway, Red Bank, Sparta, Wantage, and West New York.
Additionally, Bridgewater’s corrective action plan did not address the 2007 law, the appendix states; in Red Bank, OSC also recommended an independent third party do the fiscal assessment; and in Wantage, the comptroller noted that the town’s corrective action plan did not address whether there had been a legal review conducted.
“The failure of the nine municipalities to prepare a corrective action plan, as directed by the comptroller’s office, creates risks that taxpayer funds will be wasted and that unlawful policies will remain in effect,” Walsh wrote in the letter.
Walsh can request the Governor withhold state aid from the municipalities and request the Division of Local Services “impose a corrective or remedial action plan.”
This follows a 2022 corrective action plan report that found 57 of 60 municipalities studied were, at least partially, violating laws from 2007 and 2010 that capped unused sick time payouts to $15,000 and placed limits on accruing vacation time for public employees.
As a consequence of that report, all 57 municipalities were required to create a corrective action plan that included the following: a legal review; an independent fiscal assessment; new internal controls; and approval of their corrective action plan by the municipality’s governing body.
In March and April of 2023, the corrective action plan alerted all municipalities as to whether or not their corrective action plan was approved or needed further action.
Although the vast majority of municipalities either had their corrective action plan approved or are in the process of updating them, these nine, the letter accuses, have done little to adjust their deficient corrective action plan.