BY WALTER ELLIOTT
IRVINGTON – Several township officials responded to a State Comptroller’s report on Irvington’s financial procedures some 72 hours after its March 5 release.
Business Administrator Musa A. Malik, on March 8, in particular countered Acting State Comptroller Kevin D. Walsh’s “Irvington: A Performance Audit of Financial Management Practices” follow-up report. The report was based on a review state auditors had conducted August 2021 and July 2023 for its 2023 review.
The state’s 2023 review and March 5 report is an assessment update of its Nov. 30, 2011 review and the March 4, 2009 audit that started the chain of events to begin with. What started in 2011 with a finding that only eight of the 21 recommendations made in 2009 had been fully implemented is now down to six needing to be fully carried out:
- Maintaining accounting records.
- Implementing adequate financial reporting internal control policies.
- Conduct timely and effective employee evaluations.
- Produce timely and effective required financial information.
- Ensure that its Chief Financial Officer has an unexpired Municipal Finance Officer Certificate.
- Identify and prevent contractual relationships that create conflicts of interest between the Township and its officers and employees.
There is also a seventh recommendation in Walsh’s eight-page report: That the N.J. Department of Community Affairs Division of Local Government Affairs “install a state fiscal monitor to ensure that Township officials come into compliance with corrective actions.”
Irvington, should it receive a state fiscal monitor, will share that experience with the City of Newark and the Belleville Public Schools.
Newark received a monitor during Mayor Cory Booker Administration as a condition of getting state transitional aid. That monitor, after several years, has left Newark City Hall.
The Belleville Public Schools and its Board of Education still has a Monitor Thomas Egan in its administration building and at its BOE Trustees meeting. Eagen was called in when the district budget had a $4 million deficit in 2014. His presence has been less frequent in the last year, however, and the district had not provided him a Zoom link for meetings.
The 2023 review applied the U.S. General Accountability Office’s Standards for Internal Control in the Federal Government, also called “The Green Book,” to four areas: accounting records preparation, maintenance and reconciliation; financial reporting internal control weaknesses and timely filing by law of filing financial document compliance.
State auditors had reviewed statutes and regulations against supporting documents. Those documents included the township’s financial and debt statements, budgets and auditors’ reports for Calendar Years 2017-2021. Township personnel were interviewed.
Auditors had found a continuing weakness in maintaining and reconciling municipal accounting records from 2009.
The Township reported, for example, $789,210 in “unidentified expenditures” in its 2019 audit. The Finance Department had moved that amount from that year’s budget to its grant fund from federal and state grants.
The department had not, however, charged $661,350 in salaries and wages and $127,860 in other expenses to the same grant fund. None of these expenditures were put before the Township Council.
DGLS directs that municipalities keep a general ledger for accounting – a responsibility of the CFO.
Auditors found that the internal controls, found weak in 2009 and 2011, were still deemed insufficient. There were several accounts that were not reconciled with corresponding bank statements. All but two, as of January 2023, had been reconciled through Dec. 31, 2022.
The 2023 review found that two employees received “highly effective” ratings despite frequently missing work deadlines and questionable attendance and unauthorized overtime. Township management has developed job descriptions, partially implemented annual evaluations and taken appropriate corrective action on employees.
The Township was found to file its financial statements to the DLGS consistency late 2017-2021. Its annual financial statements, budget and audit reports exceeded Irvington’s average 145 days late filing 10 times. One 2017 audit report was 300 days late.
Auditors had found that Irvington’s CFO, who has been employed since 2009, had his certificate expire on Dec. 31, 2022 and invalid on July 1, 2023. It was the third time since 2020 that the certificate became inactive. The latest certificate was reinstated Sept. 20, 2023.
Municipal CFOs are to have a current two-year MFO Certificate from the DLGS Director contingent on filling out an application, paying a $50 fee and meeting continuing education requirements. Applicants’ renewal may be made within six months of its expiration – which the director may extend up to a year.
Regarding conflict of interest, auditors found that the Township had leased space for its Office of Community Development and Planning 2017-23. The CFO’s company had submitted lease bids May 2022 – which the CFO signed for July 1, 2022 – June 30, 2023. The company was the only bidder.
The initial July 2017 lease started at $207,900, which increased by $39,900 through July 30, 2018, by $45,000 July 1, 2021-June 30, 2022 and by $46,000 since July 1, 2022. The township website directory lists the office as being on 660 Stuyvesant Ave.’s first floor.
“Good governance requires commitment and vigilance,” said Walsh to a reporter March 5. “What we found in Irvington was the opposite; leaders and staff who disregarded recommendations, laws, ethics and their obligation to safeguard public funds.”
Copies of Walsh’s report went to Gov. Phil Murphy, Senate President Nicholas Scutari, Assembly Speaker Craig Coughlin – and Irvington Mayor Anthony “Tony” Vauss.
Malik, in his March 8 response, questioned why the state had taken 10 to 12 years to follow up on the 2009-11 report and audit. The faults found in 2009 predated the Vauss Administration, which was elected and took office by July 1, 2014.
Citing pre-2014 conditions, said the BA, undercuts progress made by the current administration. There has since been an overhaul of several departments and change of key personnel.
The Walsh report noted that the 2020-21 COVID pandemic had delayed the now-2023 audit.
Malik and Irvington’s Law Department presented to a reporter March 8 correspondence showing that the Township and the Comptroller’s Office have been working on correcting “legacy” compliance issues.
Malik contested the report’s statements on employee evaluations, the CFO’s certification and the leasing of 660 Stuyvesant Ave. The BA said that state officials had approved of the changes, resolving some matters and prompting the Township to contest others.
Irvington’s annual municipal budget, said Malik, had been passed by the Township Council and blessed by the state the last 10 straight years.
