A host-agency arrangement was established in 1993 with the New Jersey Institute of Technology (NJIT), a state-funded university. Under a Memorandum of Understanding (MOU) which governs all aspects of the arrangement, the NJTPA is an affiliate of the university. NJTPA staff members are employees of NJIT with the same health, education, leave accrual, collective bargaining, and pension benefits.
NJIT (as host agency) provides the cash flow for the NJTPA operation. They are reimbursed in the following manner: All funds flow from the USDOT to NJDOT, and from NJDOT they flow to NJIT. Federal transportation funds, including applicable metropolitan planning funds authorized by SAFETEA-LU, are first allocated to state departments of transportation. For an organization to receive federal funds, it first must document that its accounting, auditing and control procedures confirm that federal monies are spent for the purposes intended. NJIT has been audited and reviewed successfully by the Department of Health and Human Services.
NJIT receives an annual administrative fee for providing NJTPA services such as payroll, human resources administration, purchasing and grants management. In addition, NJIT's grants management and accounting systems furnish accurately detailed records of allowable expenditures for "pass through" grants from the NJTPA to city/county member agencies (subregions). Such records are required by federal funding agencies.
The NJTPA has no financial accounts independent of NJIT. Therefore all accounting is conducted by NJIT (with oversight by the NJTPA, NJDOT, FHWA and FTA). NJIT retains a team of internal and external auditors who conduct a single annual audit on all university accounts, including the NJTPA.