New Jersey § 40a:5-16

§ 40a:5-16.

Notwithstanding the provisions of N.J.S. 40A:5-16 , the governing body of any local unit may, by resolution, provide for and authorize

payment of an advance to any nonprofit organization or agency with which the local

unit has entered into a service contract, for the purpose of meeting service program

start-up costs; provided, however, that: a. The source of the funds to be advanced is a Federal grant allowing the local unit

to receive funds in advance of disbursement and requiring that any interest earned

on said funds be returned to the Federal Government; b. The governing body has determined, by resolution, that the advance is necessary

in order to prevent undue hardship to said contractor in achieving the objectives

of the Federal grant; c. The amount of the advance to any given contractor does not exceed an amount equal

to the total amount of the contract divided by the number of months in the term of

the contract, and provided further that the total disbursements of the local unit

to the contractor, including the amount of the advance outstanding, shall not, at

any time, exceed the total cash receipts of the local unit under the Federal grant

up to that time; and, d. The resolution authorizing the advance includes a schedule for the depletion of

the advance, in accordance with sound accounting practice, indicating that the advance

will be entirely depleted by the termination date of the contract.