Fy 06 Cap

TOWNSHIP OF EWING COUNTY OF MERCER, NEW JERSEY CURRENT YEAR FINDINGS AND RECOMMENDATIONS 1. Finding The fiscal year 2007 budget does not include a full appropriation for the appropriate amounts of obligations to Ewing Lawrence Sewerage Authority. Recommendation The budget should allocate sufficient funds for the obligation to Ewing Lawrence Sewerage Authority. Response In FY07, the Township established a reserve for $375,000. Over the next 5 years the Township will raise 1/5 of the $1.5 million needed to pay ELSA June 1, instead of July 1. This will amount to an appropriation of $225,000 per year each of the next 5 years. 2. Finding There are too many different departments applying for grants and then requesting their own drawdowns of reimbursement for expenditures. As a result, grants are not being properly tracked. Recommendation The Township should designate an individual to be the grant administrator. This individual should track all grants. Response The Chief Finance Officer has requested an additional staff member to assist with the management of the grants and to perform additional finance responsibilities. During Fiscal Year 2007 the Township continues to work with Ron Rukenstein and Associates on grant administration. All departments will again be informed that all grants should begin and end in the finance.

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TOWNSHIP OF EWING COUNTY OF MERCER, NEW JERSEY CURRENT YEAR FINDINGS AND RECOMMENDATIONS (CONTINUED) 3. Finding The Township does not comply with Technical Accounting Directive #85-2, “Accounting for Governmental Fixed Assets.” Recommendation The Township should maintain fixed assets accounting and reporting system for general fixed assets in accordance with the above-mentioned regulation. Response Administration has initiated the gathering of data to develop an inventory list of Township fixed assets with an expected completion date of June 30, 2007. 4. Finding The Municipal Court’s cash disbursements are reviewed and approved by the court administrator, who also prepares bank reconciliations. Also, tickets eligible for destruction were not pulled or disposed of as required. Recommendation An individual who is independent from both cash receipt and cash disbursement functions should prepare bank reconciliations. It is also necessary to have an accounting procedures manual prepared, in order to facilitate a better transition in the event an employee leaves. Also, tickets eligible for destruction should be pulled and disposed of in a timely and proper manner, as required. Response This is the procedure mandated by the state judiciary. A plan will be developed by the Acting Court Administrator. The Judge will be requested to review and initial all bank reconciliations prior to submission to the Chief Finance Officer who will also review and initial the court account bank reconciliations on monthly basis.

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TOWNSHIP OF EWING COUNTY OF MERCER, NEW JERSEY CURRENT YEAR FINDINGS AND RECOMMENDATIONS (CONTINUED)

5. Finding Dog licenses are distributed out of sequence. The total licenses issued during the year do not equal the replacement licenses plus the amount of paid licenses. These numbers are not reconciled to the monthly reports. There was one license issued with no fee that was not for a service dog and was not indicated as a replacement tag. Also, pre-numbered receipts are not being used to record the collection of license fees paid, and employees have the ability to edit the amounts collected in the computer system. Recommendation Utilize computer software or keep manual records. Perform reconciliation between yearly and monthly reports. Keep records and written explanations related to any gaps in license sequence. For no-fee licenses issued, properly indicate the type of license in the system. Do not issue licenses with no fee unless they are for service dogs or replacement tags. Also, use pre-numbered receipts to record the collection of license fees paid. The ability of employees to edit the amounts collected in the computer system should not be allowed. Response The Clerk will work with the software developer to ensure that licenses are issued automatically in sequence instead of requiring the user to enter the license number manually prior to June 30, 2007. 6. Finding The Construction Office is not always stamping permits with an authorized signature. Two of the construction files selected for testing could not be located. Also, monies received are not being deposited within 48 hours, as is required. Recommendation All permits should be stamped with the required authorized signature. All construction files should be maintained by the Construction Office. Also, all monies received should be deposited within 48 hours, as required. Response The Construction Official has reviewed the policy with staff regarding the importance of signatures on permits and will perform periodic checks to ensure compliance.

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TOWNSHIP OF EWING COUNTY OF MERCER, NEW JERSEY CURRENT YEAR FINDINGS AND RECOMMENDATIONS (CONTINUED)

7. Finding There is a lack of segregation of duties in the Finance Department. The CFO makes all wire transfers, and no one reviews the transfers. In addition, the bank reconciliations are not reviewed by administration. Recommendation All wire transfers and bank reconciliations should be reviewed by administration. Response All requisitions require the signature of both the CFO and the Administrator. Although wire transfers are made by the CFO, the recording of all disbursements is entered into the accounting system by the Purchasing Assistant. The Administrator will review all wire transfers made by the CFO and will review and initial bank reconciliations until an accountant is hired in the Finance Office, who will then prepare the reconciliations which will then be reviewed by the CFO. 8. Finding A majority of the resolutions in the minutes were missing resolution numbers. Recommendation All resolution numbers should be indicated in the minutes. Response The Clerk has corrected this and will ensure that the resolution numbers are updated with the minutes going forward.

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