TRENTON – An investigation by the Office of the State Comptroller (OSC) has revealed that the Borough of Palisades Park paid tens of thousands of dollars each year to employees who had unused sick leave, in violation of state laws passed expressly to stop such costly payouts.

In reaction to multiple reports that employees were using unused benefits to artificially increase their salaries, the State Legislature passed legislation in 2007 and 2010 to prevent employee benefits from being abused. The laws ban annual payouts for unused benefits, but allow employees to collect a one-time payment upon retirement capped at $15,000.

Palisades Park ignored the laws and made costly annual payouts to its employees for years, OSC’s investigation found. For example, one employee, the Borough’s Business Administrator (BA), has a contract with time off for 12 sick days, 15 holidays, 25 vacation days, 4 personal days, and his birthday. The BA told OSC he has never taken a sick day as a Borough employee. He received sick leave payouts each year and continues to accumulate unused vacation time for another lump payout when he retires – all in violation of state law.

“Palisades Park wasted hundreds of thousands of taxpayer dollars by ignoring legislation designed expressly to prohibit this kind of waste,” Acting State Comptroller Kevin D. Walsh said. “The law is very clear on this: sick time is an essential benefit that allows employees to recover when they’re sick, not a way for employees to quietly boost their salaries. Municipal officials cannot simply pick and choose which state laws to follow. They ignored laws passed to protect taxpayers from paying such unnecessary and wasteful bonuses to public employees.”

OSC’s report identified widespread financial mismanagement in Palisades Park, resulting in the waste and abuse of hundreds of thousands of taxpayer dollars.

Borough administrators let multiple employees buy gas for their personal cars using taxpayer money on Borough-issued fuel cards. Palisades Park – a 1.25 square mile borough – spent $120,000 on gas in one year.

Borough administrators do not track which employees have fuel cards and did not know how many fuel cards they had issued. While some fuel cards are used to fuel Borough vehicles like police cars and firetrucks, OSC’s investigation concluded that Borough employees are enjoying the benefit of spending taxpayer money on gas for their personal use and with no oversight. 

Palisades Park’s part-time Chief Financial Officer (CFO) is responsible for processing payments and safeguarding Borough funds. OSC found he often approves financial transactions using Borough funds by text message and that his signature stamp is often used to approve documents without him reviewing or approving them.

In another area of its investigation, OSC found that in 2017, administrators inappropriately approved a $68,000 reimbursement request made by the BA for costs he personally incurred. The reimbursement included $16,600 in accounting services for his private business, $10,500 in legal fees for his wife, and $5,200 for a cancelled pre-paid vacation. It was rescinded after OSC began its investigation.

None of the Borough officials who approved the $68,000 reimbursement request – including the Borough’s CFO, the Borough Council, and the Mayor – intervened to block public funds from being used to pay for the BA’s personal expenses.

Palisades Park grants its BA many other extravagant benefits that wasted taxpayer money, OSC’s investigation found:

• Upon retirement, the BA will receive two weeks’ pay for every year he worked for the Borough and for every year he served on the Borough council. OSC calculated the BA would get a payout of at least $360,000 if he retired today – on top of the unlawful annual sick leave payouts he has already received.
• According to his contract, the BA can only be terminated with a unanimous vote from the Borough Council even though state law requires a two-thirds vote to remove a municipal administrator, uniquely insulating the BA from accountability.
• In addition to his $207,000 salary, the BA receives a $350 monthly car allowance without tracking mileage or other costs and despite the Borough providing him with fuel and maintenance.

“Palisades Park’s leadership failed to follow the law, failed to protect public funds, and failed to act in the best interests of Borough residents,” said Walsh. “When local leaders abuse and waste taxpayer funds, public confidence in government is harmed.”

OSC’s investigation into Palisades Park was initiated after receiving a complaint. Suspected government mismanagement or fraud can be reported to the OSC anonymously by calling 1-855-OSC-TIPS (1-855-672-8477) or by email at comptrollertips@osc.nj.gov.