Amid complaints of uncooperative township employees and $20,000 in cost overruns, auditors Holman & Frenia hammered West Deptford with 34 different issues stemming from their audit of the township’s books.
Ranging from the serious—a lack of a general accounting ledger—to the silly—an issue with a magazine subscription—the auditors admonished township officials for what they said were issues that opened up to potential fraud, without actually finding any instances of fraud.
“You should all be concerned,” auditor Keith Ingling said. “Your township funds can be stolen.”
Ingling particularly harped on the lack of a general ledger—a problem he said goes back at least as far as 2007—saying it not only complicated the audit process, but flies in the face of what’s required.
“This is not just a suggestion—this is a state statute that you are not in compliance with,” he said.
Ingling was particularly concerned with the risks presented by the lack of a general ledger, among other problems.
"We’re not saying that there is fraud," he said. "There is a significant opportunity for fraud."
Otherwise, Ingling and fellow auditor Mike Holt detailed the problems their firm found, including, but not limited to:
- Informal payment plans are in place for water and sewer charges, as well as property taxes.
- Legal bills are split 65 percent and 35 percent between the general fund and the water and sewer fund, regardless of the breakdown of legal work.
- There's a need to review the township’s Payment In Lieu of Taxes programs.
- Two employees’ salaries are being charged to the Open Space fund, without documentation establishing whether that’s acceptable.
- Township committee meeting minutes don’t have page numbers. “We want to make sure there’s not the opportunity for someone to come in and slide a page into the minutes,” Holt said.
- Two employees out on medical leave didn’t contribute 1.5 percent of their pay to medical benefits, as required by the state.
- The water and sewer billing system is so outdated, bills have to be manually adjusted using a typewriter.
- One water and sewer employee had his water meter read just three times in six years, and only paid the minimum for much of that time; when a meter was put in at the curb, Holt said, about $1,000 in charges were realized. “We just let the customer read the meter,” Ingling said.
- Three accounts with Fulton Bank using the township’s tax ID number are actually for outside groups.
- Current township policy only requires a single stamped signature on checks, with the stamp being held by someone besides the director of finance, whose signature is on the stamp. Holt recommended two signatures, and not allowing the signature stamp to be used by anyone besides its owner.
But more work needs to be done to close out the financials and then check to make sure there isn’t fraud, Ingling said.
“We’re not even to the point yet that we can, with 100 percent comfort, say that we’ve completed the financial statement audit,” he said.
With that in mind, committeeman Sam Cianfarini, who called the audit, “miserable,” moved to bump Holman & Frenia’s contract with the township to delve deeper into the audit, which was approved unanimously.
With the $20,000 in overruns plus additional costs, it puts the contract with Holman & Frenia, which has already donated money to this year’s Republican campaign, up to a max of $103,000.