West New York is among nine municipalities that have not implemented corrective action plans to prevent improper sick leave payouts after the New Jersey Office of the State Comptroller identified issues last summer.
“These nine towns are failing in their most basic responsibilities: To act as a fiduciary of taxpayer funds and to be transparent about how these funds are used,” Acting State Comptroller Kevin Walsh said in statement.
“After more than a year, they continue to delay. My office will use all of the tools we have to protect New Jersey taxpayers from fraud, waste, and abuse.”
In a letter to Gov. Phil Murphy (D), state Senate President Nick Scutari (D-22), and Assembly Speaker Craig Coughlin (D-19), Walsh is calling for the withholding of state funding if the nine municipalities do not adopt the corrective action plans in the next 30 days.
“As permitted by law, OSC may further request that the Director of the Division of Local Government Services in the Department of Community Affairs and the staff of the Local Finance Board require approval by OSC prior to the municipalities entering into contracts or expending funds,” Walsh added.
The other eight New Jersey towns identified as being out of compliance are Bridgewater, Hamilton Township (Mercer County), Pennsville, Piscataway, Red Bank, Rutherford, Sparta, and Wantage.
Of the nine towns identified in OSC’s letter, seven failed to have an independent fiscal assessment.
OSC requested this assessment to identify whether improper payments were made and need to be recovered, evaluate the strength of internal financial controls, and prevent self-dealing in the event management received unlawful payouts.
They also directed towns to submit corrective action plans to the governing body for approval so that there is transparency about past improper payouts and improper provisions in current contracts and policies. Six of the nine towns failed to do that.
By state law, all employees hired after May 2010 cannot receive more than $15,000 for unused sick leave. Employees can only receive that $15,000 at retirement – not when they resign, change jobs, or as an annual payout.
Employees also can’t carry over more than a year’s worth of vacation time. OSC’s investigation found, however, that the majority of municipalities surveyed were violating aspects of this law and continue to enter into employment contracts and collective bargaining agreements that allow for these improper payments.
“Many towns across New Jersey have made improper, wasteful payouts for years and years. It’s inexcusable that the basic steps to safeguard public funds are not being taken. Taxpayers deserve better,” Walsh added.
In July 2022, the comptroller’s office released a report finding that of 60 towns surveyed, 57 failed to follow the laws capping payouts of sick leave and accrued vacation time to government employees – creating a financial liability of many millions of dollars for taxpayers.
OSC directed the municipalities to provide corrective action plans that included specific provisions to identify and potentially recoup improper payments and prevent more wasteful payouts.
That list also included Hoboken and Union City, with the OSC indicating they are with the majority of municipalities that already adopted their corrective action plans.
A West New York spokesman did not immediately return an email seeking comment.