Numbered findings
25
Control and compliance issues in the report
Independent municipal audit · CY2022
25 control and compliance findings.
Here is what they mean.
The comparative report, which also represents CY2021, gave an unmodified New Jersey regulatory-basis opinion but identified three material control weaknesses. Overspending, delayed closing, and weak asset tracking were the principal recurring problems.
At a glance
Material weaknesses
3
The highest financial-reporting control category
Repeat findings
13
Issues reported in at least one earlier audit
Opinion scope
See report opinion
Opinion scope varies by report year and accounting basis
The opinion is not a pass/fail grade
Most regulatory statements received clean opinions—with an important exception.
Unmodified New Jersey regulatory-basis and major-program opinions; adverse GAAP-basis opinion.
Read the three opinion scopes
- New Jersey regulatory basis: Unmodified, including fixed assets.
- U.S. GAAP: Adverse because the mandated regulatory basis differs from GAAP.
- Fixed assets: None
Every numbered finding
What needs to change
“Material weakness” is an audit-control classification, not an allegation of fraud. Open a finding for the condition, why it matters, the auditor's recommendation, repeat history, and the City's separately labeled response.
2022-001 · material weakness
· Repeat since 2020
Overexpenditures
The City spent $2,823,494 above 2022 budget appropriations, $4,591,767 above available 2021 appropriation reserves, $591,099 above Federal and State Grants Fund resources, and $792,027 above General Capital Fund resources; the latter included a $572,000 down payment made without available funds. Trust Fund deferred charges also retained $17,547,411 of 2021 and $975,709 of 2020 overexpenditures.
2022-001 · material weakness
· Repeat since 2020
Overexpenditures
The City spent $2,823,494 above 2022 budget appropriations, $4,591,767 above available 2021 appropriation reserves, $591,099 above Federal and State Grants Fund resources, and $792,027 above General Capital Fund resources; the latter included a $572,000 down payment made without available funds. Trust Fund deferred charges also retained $17,547,411 of 2021 and $975,709 of 2020 overexpenditures.
Why it matters
The report says $27,321,507 of 2020–2021 overexpenditures remained as deferred charges that future budgets must raise, potentially reducing room under appropriation and levy caps; the capital ordinance remains partly unfunded.
Auditor recommendation
Strengthen availability-of-funds checks before orders, payments, transfers, and capital ordinances, and identify line-item shortfalls early enough to adopt transfers or emergency appropriations before year end.
City response · unaudited
The City said fiscal officers now pre-approve requisitions and provide monthly spending reports, written controls are being updated, and the new payroll system should improve salary and wage monitoring.
Responsible area: Management and Budget, Chief Financial Officer, Payroll, Purchasing, and departmental fiscal officers
Official report pp. 260–261 · Includes a compliance issue
2022-002 · material weakness
· Repeat since 2020
Financial closing and reporting
The City filed its unaudited Annual Financial Statement on May 23, 2023, after the March 3 deadline; general ledgers and subsidiary budget reports were not available until July 6, and subsidiary reports did not agree to general-ledger control accounts.
2022-002 · material weakness
· Repeat since 2020
Financial closing and reporting
The City filed its unaudited Annual Financial Statement on May 23, 2023, after the March 3 deadline; general ledgers and subsidiary budget reports were not available until July 6, and subsidiary reports did not agree to general-ledger control accounts.
Why it matters
Financial reporting was late, year-end closing was prolonged, underlying records did not agree, and significant adjustments were needed before public presentation.
Auditor recommendation
Adopt formal monthly and year-end closing procedures, reconcile control accounts to subsidiary ledgers and other records, and require documented second approval and support for adjusting journal entries.
City response · unaudited
The City said it was engaging a New Jersey public-sector CPA/RMA firm to help write procedures and train staff, implementing a new accounting system, seeking second approval for journal entries, and targeting closing within 27 days after month end.
Responsible area: Comptroller and Chief Financial Officer
Official report pp. 261–262
2022-003 · material weakness
· Repeat since 2014
Fixed assets
The fixed-asset inventory did not account for additions, disposals, and other changes from the prior-year balance, requiring $19,267,516 of net adjustments and reclassifications. Five of 25 sampled vehicles had been disposed but remained listed, and three sampled items could not be located.
2022-003 · material weakness
· Repeat since 2014
Fixed assets
The fixed-asset inventory did not account for additions, disposals, and other changes from the prior-year balance, requiring $19,267,516 of net adjustments and reclassifications. Five of 25 sampled vehicles had been disposed but remained listed, and three sampled items could not be located.
Why it matters
The inventory was not compliant with State requirements, did not support proper safeguarding, and presented net adjustments rather than a reliable record of additions and disposals.
Auditor recommendation
Strengthen acquisition and disposal policies, update the inventory regularly, capture all additions and disposals, and reconcile each period's inventory to the prior balance.
City response · unaudited
The City said it was enforcing disposal and transfer controls and intended to engage vendors for a full inventory, unified asset software integrated with the financial system, and improved procedures.
Responsible area: Purchasing, Internal Audit, Automotive, and asset-using departments
Official report pp. 262–263 · Includes a compliance issue
2022-004 · significant deficiency
· Repeat since 2017
Bank reconciliations
Year-end bank reconciliations retained unidentified items, including $2,202,880 later identified as interest on maturing notes and $808,546 of unexplained salary-clearing disbursements; interbank transfers lacked offsetting items and stale checks dated to 2018.
2022-004 · significant deficiency
· Repeat since 2017
Bank reconciliations
Year-end bank reconciliations retained unidentified items, including $2,202,880 later identified as interest on maturing notes and $808,546 of unexplained salary-clearing disbursements; interbank transfers lacked offsetting items and stale checks dated to 2018.
Why it matters
Unresolved reconciling items can misstate cash, conceal posting errors or overpayments, and delay detection of erroneous or potentially fraudulent activity.
Auditor recommendation
Investigate and clear reconciling items promptly, complete reconciliations within 30 days after month end, and review stale checks for proper disposition.
City response · unaudited
The City said its CPA/RMA firm would assist, reconciliations would begin when bank statements arrive, and the Comptroller's procedures manual would document the process.
Responsible area: Comptroller
Official report pp. 263–264
2022-005 · significant deficiency
· Repeat since 2019
Payroll tax and withholding overpayments
The City continued to carry $3,100,000 of receivables for 2019 payroll-tax overpayments whose recovery was uncertain. Testing also found three required Forms 1099 were not properly filed and one vendor file lacked enough information to determine whether filing was required.
2022-005 · significant deficiency
· Repeat since 2019
Payroll tax and withholding overpayments
The City continued to carry $3,100,000 of receivables for 2019 payroll-tax overpayments whose recovery was uncertain. Testing also found three required Forms 1099 were not properly filed and one vendor file lacked enough information to determine whether filing was required.
Why it matters
The City may have to fund unrecovered overpayments by future budget appropriation and remained exposed to penalties and further payroll-clearing shortfalls.
Auditor recommendation
Pursue recovery, strengthen controls over timely and accurate payroll-tax, withholding, and Form 1099 processing, reconcile Payroll Clearing Trust reserves regularly, and review vendor information for filing requirements.
City response · unaudited
The City said it was pursuing the overpayments and appealing penalties; a new payroll/HR vendor implemented in early 2023 became responsible for tax processing and wage-form filings.
Responsible area: Payroll and Finance
Official report p. 265 · Includes a compliance issue
2022-006 · compliance and other matter / significant deficiency
· Repeat since 2011
HUD grant reconciliation
CDBG, HOME, HOPWA, and ESG ledgers did not always close current activity to grant reserves, and legacy receivable and other balances still required investigation. The same numbered matter is presented once in the financial section as a downgraded compliance and other matter and again in the federal section as a significant deficiency and reporting noncompliance; the federal page heading also says the year ended December 31, 2021 although this is Finding 2022-006 in the CY2022 report.
2022-006 · compliance and other matter / significant deficiency
· Repeat since 2011
HUD grant reconciliation
CDBG, HOME, HOPWA, and ESG ledgers did not always close current activity to grant reserves, and legacy receivable and other balances still required investigation. The same numbered matter is presented once in the financial section as a downgraded compliance and other matter and again in the federal section as a significant deficiency and reporting noncompliance; the federal page heading also says the year ended December 31, 2021 although this is Finding 2022-006 in the CY2022 report.
Why it matters
CDBG Trust accounts may require adjustment and funding to resolve prior-year discrepancies.
Auditor recommendation
Continue reconciling IDIS drawdowns and activity to general and subsidiary ledgers and investigate legacy discrepancies for proper disposition.
City response · unaudited
The City said the CFO would oversee closeout of old accounts, Accounts and Control would maintain an IDIS subledger and monthly reconciliations, staff would be trained, and a grant consultant had been hired.
Responsible area: Chief Financial Officer, Comptroller, and Accounts and Control
Official report pp. 266–267 · Includes a compliance issue
2022-007 · compliance finding
Late Davis-Bacon reports
Required semiannual Davis-Bacon reports for CDBG and HOME were not filed within ten days after the reporting periods; the 2022 reports were not filed until July 27, 2023. The page heading says the year ended December 31, 2021 although the finding is numbered 2022-007 in the CY2022 report.
2022-007 · compliance finding
Late Davis-Bacon reports
Required semiannual Davis-Bacon reports for CDBG and HOME were not filed within ten days after the reporting periods; the 2022 reports were not filed until July 27, 2023. The page heading says the year ended December 31, 2021 although the finding is numbered 2022-007 in the CY2022 report.
Why it matters
The City did not comply with HUD's reporting-timeliness requirement.
Auditor recommendation
Submit required Davis-Bacon reports within ten days after each reporting period.
City response · unaudited
The CFO said it would work with departmental fiscal officers and grant-management staff to ensure timely filing.
Responsible area: Chief Financial Officer, departmental fiscal officers, and grant-management staff
Official report p. 268 · Includes a compliance issue
2022-008 · compliance finding
FEMA financial reports
The City could not provide proof that SF-425 Federal Financial Reports were submitted for FEMA Public Assistance Disaster Grants; the reports were either not submitted for 2022 or proof could not be accessed. The page heading says the year ended December 31, 2021 although the finding is numbered 2022-008 in the CY2022 report.
2022-008 · compliance finding
FEMA financial reports
The City could not provide proof that SF-425 Federal Financial Reports were submitted for FEMA Public Assistance Disaster Grants; the reports were either not submitted for 2022 or proof could not be accessed. The page heading says the year ended December 31, 2021 although the finding is numbered 2022-008 in the CY2022 report.
Why it matters
The City did not demonstrate compliance with FEMA's SF-425 filing requirements.
Auditor recommendation
Submit SF-425 Federal Financial Reports for every FEMA Public Assistance Disaster Grant.
City response · unaudited
The CFO said it would work with departmental fiscal officers and grant-management staff to ensure timely SF-425 filing.
Responsible area: Chief Financial Officer, departmental fiscal officers, and grant-management staff
Official report p. 269 · Includes a compliance issue
2022-009 · control deficiency
· Repeat since prior years
Funding of capital projects
The City was not in compliance with State capital-funding regulations: $13,041,080 of unfinanced costs for projects more than five years old remained, comprising $11,453,822 for general projects and $1,587,258 for school projects.
2022-009 · control deficiency
· Repeat since prior years
Funding of capital projects
The City was not in compliance with State capital-funding regulations: $13,041,080 of unfinanced costs for projects more than five years old remained, comprising $11,453,822 for general projects and $1,587,258 for school projects.
Why it matters
The report does not state a separate effect.
Auditor recommendation
Fund remaining deferred charges to future taxation that are more than five years old.
Official report p. 277 · Includes a compliance issue
2022-010 · control deficiency
· Repeat since 2021
Interfund balances
Large interfund balances remained at year end, including $131,160,537 owed from Current Fund to General Capital Fund, $21,520,010 from Current Fund to Federal and State Grant Fund, and $50,416,683 from Federal and State Grant Fund to General Capital Fund.
2022-010 · control deficiency
· Repeat since 2021
Interfund balances
Large interfund balances remained at year end, including $131,160,537 owed from Current Fund to General Capital Fund, $21,520,010 from Current Fund to Federal and State Grant Fund, and $50,416,683 from Federal and State Grant Fund to General Capital Fund.
Why it matters
The report does not state a separate effect.
Auditor recommendation
Clear interfund balances by transfer before year end.
Official report p. 277
2022-011 · control deficiency
· Repeat since 2021
Construction revenues
Construction Code Office records lacked enough detail to verify that revenues reached the bank, and one permit omitted an applicable electric-subcode fee.
2022-011 · control deficiency
· Repeat since 2021
Construction revenues
Construction Code Office records lacked enough detail to verify that revenues reached the bank, and one permit omitted an applicable electric-subcode fee.
Why it matters
The report does not state a separate effect.
Auditor recommendation
Record the payment source in receipt batches, preserve an audit trail from receipt to deposit, and charge every fee applicable to each permit.
Official report p. 277
2022-012 · control deficiency
General department revenues
Departments kept receipt records in different formats and could not always readily provide requested detail; one unreconciled department record showed $65,000 less than City revenue reports. The report expressly says distinct formats were not themselves a compliance violation.
2022-012 · control deficiency
General department revenues
Departments kept receipt records in different formats and could not always readily provide requested detail; one unreconciled department record showed $65,000 less than City revenue reports. The report expressly says distinct formats were not themselves a compliance violation.
Why it matters
The report does not state a separate effect.
Auditor recommendation
Consider standardizing departmental collection records.
Official report p. 277
2022-013 · control deficiency
General revenue posting
Revenue receipts were posted to incorrect accounts, including $1,822,319 of Homestead Rebates recorded as unanticipated miscellaneous revenue and $549,581 of qualified bond-refunding receipts recorded as current taxes; audit adjustments corrected the statements.
2022-013 · control deficiency
General revenue posting
Revenue receipts were posted to incorrect accounts, including $1,822,319 of Homestead Rebates recorded as unanticipated miscellaneous revenue and $549,581 of qualified bond-refunding receipts recorded as current taxes; audit adjustments corrected the statements.
Why it matters
The report does not state a separate effect.
Auditor recommendation
Research cash receipts and post them to revenue accounts with greater care.
Official report p. 277
2022-014 · compliance finding
Electronic receipt fees
Parking meter proceeds were remitted net of transaction and credit-card fees, contrary to the requirement that fees and charges be received in full and that processing fees be paid from an appropriation or authorized dedicated trust.
2022-014 · compliance finding
Electronic receipt fees
Parking meter proceeds were remitted net of transaction and credit-card fees, contrary to the requirement that fees and charges be received in full and that processing fees be paid from an appropriation or authorized dedicated trust.
Why it matters
The report does not state a separate effect.
Auditor recommendation
Charge electronic-meter transaction and credit-card fees to a budget appropriation or establish an approved dedicated trust fund.
Official report p. 278 · Includes a compliance issue
2022-015 · control deficiency
· Repeat since 2021
Tax deductions
Among 40 sampled senior-citizen and veteran deductions, one remained after ownership changed and 22 lacked applications; ten newly added deductions tested after the Assessor cited flood loss all had applications.
2022-015 · control deficiency
· Repeat since 2021
Tax deductions
Among 40 sampled senior-citizen and veteran deductions, one remained after ownership changed and 22 lacked applications; ten newly added deductions tested after the Assessor cited flood loss all had applications.
Why it matters
The report does not state a separate effect.
Auditor recommendation
Remove deductions for ineligible taxpayers and regularly update deductions after property sales.
Official report p. 278
2022-016 · compliance finding
· Repeat since 2021
Tax exemption statements
Exemption status was unsupported for 17 of 60 sampled exempt properties because neither an initial statement nor a current sworn further statement dated within three years was on file; some follow-up letters were returned undeliverable.
2022-016 · compliance finding
· Repeat since 2021
Tax exemption statements
Exemption status was unsupported for 17 of 60 sampled exempt properties because neither an initial statement nor a current sworn further statement dated within three years was on file; some follow-up letters were returned undeliverable.
Why it matters
The report does not state a separate effect.
Auditor recommendation
Obtain the statements required by N.J.S.A. 54:4-4.4, follow up on missing filings, and determine whether affected properties should remain exempt.
Official report p. 278 · Includes a compliance issue
2022-017 · compliance finding
Payments in lieu of taxes
Of 15 PILOT accounts tested, four lacked required Urban Renewal Entity audits and two audits were received too late for year-end true-up billing. Testing also found incorrect and duplicate revenue postings, including a duplicate $305,629 adjustment, and one entity's support was difficult to read and inconsistent with its audit.
2022-017 · compliance finding
Payments in lieu of taxes
Of 15 PILOT accounts tested, four lacked required Urban Renewal Entity audits and two audits were received too late for year-end true-up billing. Testing also found incorrect and duplicate revenue postings, including a duplicate $305,629 adjustment, and one entity's support was difficult to read and inconsistent with its audit.
Why it matters
The report does not state a separate effect.
Auditor recommendation
Obtain Urban Renewal Entity audits within 90 days, enforce agreements for noncompliance, post collections to correct accounts, and review reclassifications.
Official report p. 278 · Includes a compliance issue
2022-018 · control deficiency
Petty cash
One petty-cash custodian did not have the fund on hand during a surprise count.
2022-018 · control deficiency
Petty cash
One petty-cash custodian did not have the fund on hand during a surprise count.
Why it matters
The report does not state a separate effect.
Auditor recommendation
Keep petty cash on premises except amounts in use for purchases and later supported by receipts.
Official report p. 279
2022-019 · compliance finding
Surety bond coverage
The Tax Collector appointed March 15, 2022 did not receive the minimum required surety bond until November 1, 2022.
2022-019 · compliance finding
Surety bond coverage
The Tax Collector appointed March 15, 2022 did not receive the minimum required surety bond until November 1, 2022.
Why it matters
The report does not state a separate effect.
Auditor recommendation
Review bond coverage regularly, especially after personnel changes in positions required or recommended to be bonded.
Official report p. 279 · Includes a compliance issue
2022-020 · compliance finding
Health-benefit deductions
Three of 60 sampled employees had incorrect health-benefit contributions withheld: two used 2021 medical rates and one was below the Chapter 2 minimum of 1.5 percent of pay.
2022-020 · compliance finding
Health-benefit deductions
Three of 60 sampled employees had incorrect health-benefit contributions withheld: two used 2021 medical rates and one was below the Chapter 2 minimum of 1.5 percent of pay.
Why it matters
The report does not state a separate effect.
Auditor recommendation
Verify health-benefit deduction calculations before processing payroll.
Official report p. 279 · Includes a compliance issue
2022-021 · control deficiency
Health-benefit enrollment
The City lacked regular eligibility checks. Auditors could not match 193 active-plan enrollees, about 7 percent, to active payroll; 18 retirees were miscoded as active, one enrollee was listed as age 12, and online checks suggested nine of ten sampled retirees over age 90 were likely deceased.
2022-021 · control deficiency
Health-benefit enrollment
The City lacked regular eligibility checks. Auditors could not match 193 active-plan enrollees, about 7 percent, to active payroll; 18 retirees were miscoded as active, one enrollee was listed as age 12, and online checks suggested nine of ten sampled retirees over age 90 were likely deceased.
Why it matters
The report does not state a separate effect.
Auditor recommendation
Regularly verify the eligibility of active and retiree health-benefit enrollees.
Official report p. 279
2022-022 · compliance finding
Limitations on payroll audit procedures
The City did not provide direct-deposit authorizations for 23 of 60 sampled employees, overtime detail and approvals for 7 of 17, approved wage-rate support for three employees, or two W-4 forms. The report says record-retention requirements were not being met, overtime appeared unsupported, and audit procedures could not be completed.
2022-022 · compliance finding
Limitations on payroll audit procedures
The City did not provide direct-deposit authorizations for 23 of 60 sampled employees, overtime detail and approvals for 7 of 17, approved wage-rate support for three employees, or two W-4 forms. The report says record-retention requirements were not being met, overtime appeared unsupported, and audit procedures could not be completed.
Why it matters
The report does not state a separate effect.
Auditor recommendation
Retain support for overtime payments and approvals, direct-deposit authorizations, approved wage rates, and W-4 forms for the required retention period.
Official report p. 279 · Includes a compliance issue
2022-023 · control deficiency
Severance pay
The severance-calculation and authorization process was unclear and largely manual. Of ten payments tested, one appeared overpaid until later support corrected the initial input, another could not be determined from inconsistent documents, a third appeared $2,068 overpaid, and questions on six others went unanswered, preventing an audit determination.
2022-023 · control deficiency
Severance pay
The severance-calculation and authorization process was unclear and largely manual. Of ten payments tested, one appeared overpaid until later support corrected the initial input, another could not be determined from inconsistent documents, a third appeared $2,068 overpaid, and questions on six others went unanswered, preventing an audit determination.
Why it matters
The report does not state a separate effect.
Auditor recommendation
Use bargaining-unit-specific calculation templates, identify preparer and independent reviewer before payment, and retain accrued-hour support with each calculation.
Official report p. 280
2022-024 · control deficiency
· Repeat since 2021
Municipal Court ticket voids
Two of 25 sampled voided tickets and three of 25 sampled dismissed-complaint files were unavailable for review of proper approvals.
2022-024 · control deficiency
· Repeat since 2021
Municipal Court ticket voids
Two of 25 sampled voided tickets and three of 25 sampled dismissed-complaint files were unavailable for review of proper approvals.
Why it matters
The report does not state a separate effect.
Auditor recommendation
Ensure voided tickets and dismissed complaints have documented approvals.
Official report p. 280
2022-025 · control deficiency
· Repeat since 2021
Municipal Court management report
The December 2022 Municipal Court report showed substantial ticket and complaint backlogs, at least seven indictable complaints not referred to the County Prosecutor at year end, and multiple tickets older than three years that were eligible for dismissal but remained open.
2022-025 · control deficiency
· Repeat since 2021
Municipal Court management report
The December 2022 Municipal Court report showed substantial ticket and complaint backlogs, at least seven indictable complaints not referred to the County Prosecutor at year end, and multiple tickets older than three years that were eligible for dismissal but remained open.
Why it matters
The report does not state a separate effect.
Auditor recommendation
Review the tickets, determine their disposition, and remove resolved items from the Automated Traffic System.
Official report p. 280
Historical audits
Choose a report year
CY is a calendar year, FY is the older June-ending fiscal year, and TY2010 is the transition period. Comparative CY2022 also represents CY2021.
Official PDF archive
Supporting source evidence, not the primary reading experience. Independent audits only; budgets and Annual Financial Statements are separate.
| Report | Years covered | Source |
|---|---|---|
| CY2025 | 2025, 2024 | Open official PDF |
| CY2024 | 2024, 2023 | Open official PDF |
| CY2023 | 2023, 2022 | Open official PDF |
| CY2022 |
2022, 2021
No separate CY2021 report was published; this comparative audit covers both 2022 and 2021.
|
Open official PDF |
| CY2020 | 2020, 2019 | Open official PDF |
| CY2019 | 2019, 2018 | Open official PDF |
| CY2018 | 2018, 2017 | Open official PDF |
| CY2017 | 2017, 2016 | Open official PDF |
| CY2016 | 2016, 2015 | Open official PDF |
| CY2015 | 2015, 2014 | Open official PDF |
| CY2014 | 2014, 2013 | Open official PDF |
| CY2013 | 2013, 2012 | Open official PDF |
| CY2012 | 2012, 2011 | Open official PDF |
| CY2011 |
2011, 2010
This report covers CY2011 and the 2010 transition year.
|
Open official PDF |
| TY2010 |
2010
Transition-year report for the period ending December 31, 2010; it also compares the fiscal year ending June 30, 2010.
|
Open official PDF |
| FY2010 | 2010 | Open official PDF |
| FY2009 | 2009 | Open official PDF |
| FY2008 | 2008 | Open official PDF |
| FY2007 | 2007 | Open official PDF |
| FY2006 | 2006 | Open official PDF |
Project Solomon is independent of the City of Jersey City. Structured audit facts are manually source-checked; City management responses are unaudited.