Primepoint moved the city over to its system and delivered the first set of checks on Thursday
TRENTON -- A cloud of uncertainty still surrounds Trenton's former payroll company, but the city's new vendor began work immediately to make Thursday's payroll.
The city last week canceled its contract with Innovative Payroll Services amid allegations that its former CEO John Scholtz embezzled millions that was owed to state and federal payroll taxes.
City Council voted 4-3 to award an $130,000 emergency contract to Mount Holly-based Primepoint, LLC. The contract will run through February of next year.
"We were just pleased to be able to help them get through the process quickly," said Victor Scire, the company's vice president of marketing. "We're happy to be a solution for them and help them however we can."
Much of the transition involved moving the employees' payroll history over to its system since Primepoint wasn't with the city at the start of the year.
About 120 of the company's nearly 2,000 customers are New Jersey government entities, including municipalities, schools, utility authorities and fire districts.
"We have a real speciality in doing payroll for municipalities in New Jersey," Scire said, in large part because Primepoint has technology that makes calculations and deductions for pensions and health benefits simpler.
In Mercer County alone, Ewing, Princeton and Robbinsville use Primepoint.
Trenton first learned there was a problem with IPS in late December when a $3.36 million shortfall in federal payroll tax deposits was discovered for the third and fourth quarters, according to the lawsuit it filed. The shortfall for the state payroll taxes is still being determined.
It appears, based on the lawsuit, that city officials relied on the federal quarterly tax returns that IPS sent them to show them what was paid on the city's behalf.
But Scire said Primepoint encourages its customers to verify directly with the U.S. Department of Treasury and the state that deposits were made. He said logins can be created both with the Electronic Federal Tax Payment System and the state Division of Taxation's filing service.
"We encourage them to get it directly from the source," Scire said.
It's a sentiment echoed by Princeton's CFO Kathy Monzo.
"I have recommended for years that CFOs should be regularly verifying payroll tax filings when they have an outside vendor filing for them," she said.
Primepoint also has a $5 million fidelity bond insurance policy that would protect the city in the event of errors or thefts. IPS had a $1 million policy.
The following is a listing of the towns that responded to a request for information about which payroll company they use:
Ewing: Primepoint
Hamilton: PayServ
Hightstown: In-house using Edmunds finance system
Hopewell Borough: R&L DataCenters
Lawrence: ADP
Pennington: ADP
Princeton: Primepoint
Robbinsville: Primepoint
Cristina Rojas may be reached at crojas@njadvancemedia.com. Follow her on Twitter @CristinaRojasTT. Find The Times of Trenton on Facebook.