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Borough of Bellmawr Year End Dec. 31, 2019 Audit Yields Three Findings

The year end December 31, 2019 audit for the Borough of Bellmawr yielded three findings. A Corrective Action Plan has been filed.

The year end December 31, 2019 audit for the Borough of Bellmawr has yielded three findings:

Finding No. 2019-001
Criteria or Specific Requirement
The payroll process should follow statutory guidelines and Borough ordinances.

Condition
The Borough did not process payroll in accordance with established guidelines.

Context
The following items were found during a test of payroll disbursements and reporting:

  1. Four employees tested were not paid according to the salary ordinance.
  2. The base salary of seven employees tested did not agree to the base salary reported on the quarterly pension reports.
  3. Amounts reported on quarterly PERS and PFRS pension reports did not agree to the supporting payroll reports for all four quarters.
  4. The quarterly pension reports for all four quarters were not filed timely.
  5. The quarterly NJ927 was not properly prepared for one quarter tested.
  6. Health benefit contributions were not calculated correctly for four employees tested.

Effect
Inaccurate and untimely payroll reports were filed with the respective agencies and employees did not receive proper deductions.

Cause
Oversight by the responsible personnel.

Recommendation
That the Borough review procedures with respect to the payroll process, and adhere to healthcare and pension deduction guidelines, including information contained in Local Finance Notices issued by the State of New Jersey, Division of Local Government Services.

View of Responsible Officials and Planned Corrective Action
The responsible officials agree with the finding and will address the matter as part of their corrective action plan.

Finding No. 2019-002
Criteria or Specific Requirement
Transactions between funds (Interfunds) should be liquidated within a reasonable period of time and transactions should be posted to the respective general ledger of each fund.

Condition
The Borough had several interfund balances as of December 31. The interfund balances between funds in the respective general ledgers were not in agreement prior to audit adjustments.

Context
During the year numerous transactions between Borough funds occurred that were not properly posted to the general ledger of each fund.

Effect
The general ledgers for the funds of the Borough were not accurate and required adjustments to agree to cash reconciliations and other interfund balances.

Cause
There were timing differences between the reconciliation function and the maintenance of the general ledger.

Recommendation
That all transactions between Borough funds (interfunds) be reviewed prior to the end of the year and that all activity be posted to the respective general ledgers of the Borough.

View of Responsible Officials and Planned Corrective Action
The responsible officials agree with the finding and will address the matter as part of their corrective action plan.

Finding No. 2019-003
Criteria or Specific Requirement
N.J.S.A. 40A:4-57 requires that budgetary transfers be approved by a resolution of the governing body prior to being over-expended.

Condition
Appropriations were over-expended prior to transfers and approved budget transfers of current appropriations and appropriation reserves were not properly recorded.

Context
One 2019 budget appropriation was over-expended twice prior to budget transfers. One budget transfer posted to the 2018 appropriation reserves was not approved by the governing body (appears to have been duplicated). One bond ordinance had commitments charged against it prior to the effective date of the ordinance.

Effect
The Borough is not in compliance with the above referenced statute and controls over current budgetary accounts are not effective to reduce the likelihood that errors could occur and not be detected.

Cause
Oversight by the responsible personnel.

Recommendation
That the Borough adheres to statutes with respect to over-commitments, ordinances and encumbrances.

View of Responsible Officials and Planned Corrective Action

The responsible officials agree with the finding and will address the matter as part of their corrective action plan.

Summary Schedule of Prior Year Audit Findings and Recommendations as Prepared by Management

Finding No. 2018-001
Condition
The Borough did not process payroll in accordance with established guidelines as promulgated by Borough ordinance and health benefit deductions were not calculated in accordance with state statutes. In addition, amounts reported to the Division of Pensions for Public Employees’ Retirement System (PERS) and Police and Firemen’s Retirement System (PFRS) did not agree to amounts per payroll reports.

Current Status
This condition still exists. See Finding 2019-001.

Planned Corrective Action
The Borough will implement procedures as part of their corrective action plan.

Finding No. 2018-002
Condition
The Borough had several interfund balances as of December 31. The interfund balances between funds in the respective general ledgers were not in agreement prior to audit adjustments.

Current Status
This condition still exists. See Finding 2019-002.

Planned Corrective Action
The Chief Financial Officer will review all interfund balances prior to the end of the year.

Finding No. 2018-003
Condition
Appropriations were over-expended prior to transfers and approved budget transfers of current appropriations and appropriation reserves were not properly recorded. There was one appropriation reserve that was over-expended.

Current Status
This condition still exists. See Finding 2019-003.

Planned Corrective Action
The Borough will implement procedures as part of their corrective action plan.

FEDERAL AWARDS
Not Applicable.

STATE FINANCIAL ASSISTANCE PROGRAMS
Not Applicable.

A Corrective Acton Plan was prepared and submitted to the Division of Local Government Services. Click the image to view in greater detail.

To view the audit in its entirety and the Schedule of Findings, click the images below:

Schedule of Findings and Recommendations for the Year Ended December 31, 2019:

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