Based upon the review the auditing agency prepares several reports, including an Annual Audit Report and what is commonly known as the "Management Report".
Based upon the audit documentation released by the Township, the review of the Township's operations did not reveal significant findings that normally would be reported in an annual audit. If the findings are reported in the Annual Audit, the Township would be required to prepare a document known as the "Correction Action Plan". That plan then is adopted by the Governing Body and filed with the State of New Jersey. By doing so, the State recognizes that municipality has operational issues to clear up.
This year, the Township of Galloway was deemed clear as to not having any reportable auditing issues in the audit process, yet several recommendations regarding the Township's operations were provided by the Township Auditor in a Management Letter to Mayor and Council on March 27, 2014. The Auditor for the Township is Leon Costello with Ford Scott & Associates.
The Township is not required to report such recommendations to the State. Therefore, unless the content of the Management Letter is reported to the general public, then Mayor and Council, and Township Management can just report to the public that they received a 'clean audit' even though several inconsistencies exist within their municipal operations. Giving the appearance all is good with the Township.
Well, we have released the Management Letter in full, and have decided to report, in summary, what the recommendations to Mayor and Council were by the Township Auditor regarding their municipal operations.
General and Sewer Capital Funds
The Township in 2013 addressed several untuned capital improvements in both the General and Sewer Capital funds by canceling their balances. There were four General Capital Ordinances totaling $43,080 which have not been permanently funded, but now addressed in the 2014 budget process. The Sewer Capital Fund has three ordinances over five years old with unfunded balances totaling $156,941 for which plans to raise funds are also in the 2014 budget.
Trust Funds
It was observed that over $2.1 million dollars are categorized as Trust (Inspection) Escrows. Among the detail, it was determined over 700 project balances are older than 10 years old and some with significant balances. This also includes over $550,000 in "recreation contributions".
Clerk's Office
As a follow-up to the auditors comment in the 2012 audit, the Clerk's Office did prepare monthly dog reports to the State in 2013, however, remittances of State monies were not always turned over monthly. The Auditor has informed the Clerk of the requirement of monthly submissions, even though monies in some months are not significant.
Tax Office
In 2013 the Auditor identified approximately $49,000 in a tax credit balance from years prior to 2012 for one property. The credit did not change in 2013, however was not included in the Township's tax overpayment balance as of year end. The Auditor has recommended that the $49,000 tax credit balance be properly accounted for, investigated and addressed by the Township.
In addition, as a comment in the 2012 Audit relating to senior citizen and veterans deductions support and identified one 2013 veteran's deduction for which support could not be located and provided.
Finance Office
Cash
The Auditor has reported that there "seems to be a miscommunication between the Finance Office and Clerk's Office as to whom is responsible for reconciling the Clerk's bank account, as it was not reconciled throughout the year and each office presumed the other was performing the duty". The Auditor recommended that the account is reconciled on a monthly basis.
There are outstanding checks over one year old on both the bail and regular municipal court year end bank reconciliations which should be reviewed and appropriate action taken.
Payroll
There are two main payroll sub accounts for which ending general ledger balances did not coincide with year end subsequent payments, indicating actual liability balances are incorrect. Auditor has recommended the payroll agencies balances be reviewed and appropriate action taken to correct or adjust these balances to actual liability amounts.
The Auditor has identified one former employee, which was deemed to not be an on-call emergency type of employee, utilizing a take home vehicle for which non-cash compensation was not reported on this year end W-2. The Auditor identified the payroll clerk was not aware of such requirement. The Auditor has recommended the Township consider the reporting requirement if similar situations arise.
Fixed Assets
The Auditor has identified that the Township has taken positive steps in improving controls over fixed asset accounting. However, according to the Auditor, "it appears the Township has not determined what department(s) or individuals should be responsible for tracking and documenting changes in Township owned land and/or buildings.
The Township sold several properties in 2013 that were not recorded properly, according to the Auditor's report. The Auditor recommends that the Township review the controls and procedures over the purchase and sale of land and buildings, and the recording and documentation to support the transactions.
A couple of the Auditors comments appear to include multiple years of the same error that the Township has yet to clear up. Hopefully by releasing this additional information, the operations of the Township will most certainly have a spot light on it and clear up the continued inconsistencies.
The Auditor has reported that there "seems to be a miscommunication between the Finance Office and Clerk's Office as to whom is responsible for reconciling the Clerk's bank account, as it was not reconciled throughout the year and each office presumed the other was performing the duty". The Auditor recommended that the account is reconciled on a monthly basis.
There are outstanding checks over one year old on both the bail and regular municipal court year end bank reconciliations which should be reviewed and appropriate action taken.
Payroll
There are two main payroll sub accounts for which ending general ledger balances did not coincide with year end subsequent payments, indicating actual liability balances are incorrect. Auditor has recommended the payroll agencies balances be reviewed and appropriate action taken to correct or adjust these balances to actual liability amounts.
The Auditor has identified one former employee, which was deemed to not be an on-call emergency type of employee, utilizing a take home vehicle for which non-cash compensation was not reported on this year end W-2. The Auditor identified the payroll clerk was not aware of such requirement. The Auditor has recommended the Township consider the reporting requirement if similar situations arise.
Fixed Assets
The Auditor has identified that the Township has taken positive steps in improving controls over fixed asset accounting. However, according to the Auditor, "it appears the Township has not determined what department(s) or individuals should be responsible for tracking and documenting changes in Township owned land and/or buildings.
The Township sold several properties in 2013 that were not recorded properly, according to the Auditor's report. The Auditor recommends that the Township review the controls and procedures over the purchase and sale of land and buildings, and the recording and documentation to support the transactions.
A couple of the Auditors comments appear to include multiple years of the same error that the Township has yet to clear up. Hopefully by releasing this additional information, the operations of the Township will most certainly have a spot light on it and clear up the continued inconsistencies.
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