State Oversight & Budget Process

The Division of Local Government Affairs, part of the State of New Jersey’s Department of Community Affairs, along with the Local Finance Board possess broad powers over municipal finance and budgeting. Together these entities promulgate rules and regulations to enforce the Local Bond Law (NJS 40A:2), Local Budget Law (NJS 40A:4), Local Fiscal Affairs Law 40A:5), and the Local Public Contracts Law (40A:11).

The State reviews municipal budgets and financing ordinances for compliance to the same. For example, State approval in required prior to the adoption of a municipal budget. In sum, the State of New Jersey is one of the most strict regulators of municipal finance in the country. The regulations protect local governments from the fiscal mismanagement and fiscal insolvency.

For further information, see the New Jersey Department of Community Affairs (DCA) website.

New Jersey budgets are based on the results of the prior fiscal year. The results of the prior year, however, are not finalized until February 10th when Annual Financial Statements are due to the State per statutory deadlines. As a result, municipalities must adopt temporary budgets to cover expenses from January 1st through the adoption of a budget for the new fiscal year. The budget deadlines per the Local Budget Law are as follows:

In order to meet the statutory deadlines, the Township begins its budget process in the fall. Departments submit requests and explanations of such requests which are reviewed administratively. The requests are compiled into a draft budget document which is reviewed by the Township Committee in budget workshops which are open to the public. As part of these sessions, departments and volunteer groups review their requests with the Committee. Necessary changes are made to the preliminary document per resulting policy directives. In February final results of the prior fiscal year are incorporated into the document in preparation of introducing the budget by February 10th.

The introduced budget is then published in the paper at least ten days prior to a public hearing. The public is allowed up to 28 days from the introduction of the budget to review the document prior to the public hearing. The public hearing and the final adoption of the budget typically take place on the same day, no later than March 20th per State regulations.

Review Mendham Township Budget & Financial Documents here.