SUMMARY OF SYNOPSIS OF AUDIT REPORT FOR PUBLICATION. Summary of synopsis of 2004 audit report of the City of Hoboken as required by N.J.S.

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1 SUMMARY OF SYNOPSIS OF AUDIT REPORT FOR PUBLICATION Summary of synopsis of 2004 audit report of the City of Hoboken as required by N.J.S. 40A:5-7 Combined Comparative Balance Sheets June 30 Assets Cash and investments $16,116,304 $12,032,061 Taxes and liens receivable 461, ,390 Property acquired for taxes - assessed value 2,806,900 2,806,900 Other receivables 208,825 1,274,237 Mortgage receivable 993,429 1,078,116 Grants receivable 2,771,504 3,702,174 Loans receivable 4,604,890 4,604,890 Fixed Capital 42,472,288 42,472,288 Deferred charges 7,622,302 4,773,625 Deferred charges to future taxation-funded 51,163,338 43,603,500 Deferred charges to future taxation-unfunded 6,894,503 19,524,174 Total assets $136,115,917 $136,267,355 Liabilities, reserves and fund balance Promissory note payable-hcia $993,429 $1,078,116 Improvement authorizations 4,935,241 20,391,884 Bond anticipation notes payable 11,535,000 5,115,000 General serial bonds 74,246,442 67,349,000 Loans payable 2,596,896 2,784,500 Other liabilities and special funds 3,605,179 6,880,205 Reserve for encumbrances 4,293,778 2,281,716 Accounts payable 0 786,590 Various reserves 528,608 1,015,989 Appropriated reserves-federal & State Grant 1,581,707 1,600,935 Reserve for amortization 11,677,288 10,827,288 Reserve for certain assets & receivables 14,663,793 10,691,652 Fund balance 5,458,556 5,464,480 Total liabilities, deferred revenues, reserves, and fund balance $136,115,917 $136,267,355

2 SUMMARY OF SYNOPSIS OF AUDIT REPORT FOR PUBLICATION Summary of synopsis of 2004 audit report of the City of Hoboken as required by N.J.S. 40A:5-7 Current Fund Statement of Operations and Changes in Fund Balance June Revenue and other income realized: Fund balance utilized Miscellaneous revenue anticipated $40,098,844 $43,114,508 Collection of delinquent taxes 77,372 90,483 Collection of current tax levy 79,979,859 77,427,817 Non-budget revenue 2,169, ,105 Other credits to income 1,994, ,882 Total revenue and other income 124,319, ,799,795 Expenditures Budget appropriations 64,175,062 64,556,958 Local school district tax 29,285,155 27,411,747 County taxes 30,686,544 31,441,467 Interfund advances 445,108 1,562,991 Tax appeal judgments 2,498, ,480 Other 58,000 55,624 Total expenditures 127,148, ,715,267 Deficit in revenues (2,828,921) (3,915,472) Adjustments to income before fund balances: Expenditures included above which are deferred charges to budget of succeeding year: Overexpenditure of appropriations 4,370, ,814 Overexpenditure of appropriation reserves 216,827 3,235 Emergency appropriations 1,869,293 4,587,806 2,630,342 Statutory excess/(deficit) to surplus 1,758,885 (1,285,130) Deficit in operations to raised in budget of succeeding year 1,285,130 Fund balance, beginning of year 1,220,611 1,220,611 Fund balance, end of year $ 2,979,496 $ 1,220,611

3 SUMMARY OF SYNOPSIS OF AUDIT REPORT FOR PUBLICATION Summary of synopsis of 2004 audit report of the City of Hoboken as required by N.J.S. 40A:5-7 Parking Utility Fund Statement of Operations and Changes in Fund Balance Year ended June 30, 2004 Revenue and other income: Operating surplus anticipated $ 2,624,287 Parking Fees - Continuing Operations 6,860,628 Parking Fees - Midtown Garage 1,421,837 Parking Fees Garden St. 535,145 Permits 548,232 Coupons 211,063 Miscellaneous 3,808 Interest on Investments 47,256 Other credits to income 125,974 Total revenues 12,378,230 Expenditures: Salaries and wages 1,150,846 Other expenses 2,956,234 Debt service 2,241,758 Social security 85,451 Deferred charges 481,338 Surplus (General Budget) 5,374,721 12,290,348 Excess/(Deficit) in revenue 87,882 Adjustments to income before fund balances: Expenditures included above which are deferred charges to budget of succeeding year: Expenditure without an appropriation 737,393 Statutory excess to surplus 825,275 Fund balance, beginning of year 4,151,876 4,977,151 Decreased by utilization as anticipated revenue 2,624,287 Fund balance, end of year $ 2,352,864

4 Six months ended June 30, 2003 $ 5,583,211 3,499, , , , ,582 44,534 39,164 10,070, ,200 1,012, , ,864 8,090,544 10,204,089 (133,465) 544, ,200 9,323,887 9,735,087 5,583,211 $ 4,151,876

5 Summary of Audit Report for Publication Summary of 2004 Audit Report for the City of Hoboken of Hudson County, New Jersey as Required by N.J.S. 40A:5-7 Recommendations June 30, 2004 We suggest the following: We suggest the City hire a full-time CMFO who will devote all of his/her attention to performing the duties of such office. To eliminate the City s structural deficit, which occurs when the recurring revenues generated by the City, such as property taxes, fees and permits, municipal court fines, etc., do not meet or exceed the amount required to fund the City s operating expenses, we suggest the City consider either reducing its operational costs, increasing taxes, or a combination of both. The City must ensure that all items are properly encumbered and charged in the proper fiscal year prior to the actual purchase of goods and services. The City should ensure that contributions received from the Ursa Development Group to redevelop portions of the Northwest Redevelopment area, which may be allocated at the discretion of the City, be approved by the City Council and be expended in accordance with the State s Local Public Contracts Law. The City should designate an employee to review the asset appraisal report, prepared by the appraisal company, to ensure the accuracy and completeness of the asset listing. The City should prepare a monthly reconciliation of taxes receivable between the Finance and Tax Collector s departments in order to ensure all transactions are recorded on a timely basis. Also, all collections received by the Finance Department from the Tax Collector should be recorded to the proper general ledger accounts. The City should minimize interfund activity during the year and liquidate all interfunds at the end of each fiscal year. The City should carefully monitor its cash flows and only enter into contracts and commitments if adequate and timely funding is available in order to minimize interfund activity. The City should implement a process of manually preparing journal entries with supporting documentation which would then be reviewed by the Chief Financial 1

6 Officer prior to recording in the general ledger in order to eliminate the numerous instances of incorrect journal entries being recorded. The City should file the proper notification with the Director of the Division of Local Government Services in order to make grant awards available for use in a timelier manner should they receive a grant award subsequent to the adoption of the budget. The City should carefully review each check and wire transfer, received from a grantor agency and ensure that it is properly recorded in the Grant Fund. It should also ensure cash disbursements related to grant programs are properly recorded in the Grant Fund. The City should ensure that all bank reconciliations agree to the general ledger for all accounts on a monthly basis. The City should establish a general ledger account for the payroll cash account in order to accurately track the activity from month to month. In addition, the ending balance in the general ledger should be reconciled to the related bank account. The City should investigate outstanding checks older than six months to determine their proper disposition. The City should ensure that Dog License Trust Fund expenditures and the State's share of Dog License fee collections be paid out of the Dog License bank account, and charged to the proper General Ledger account within the Dog License Trust Fund. Spending reserves should be consolidated into the Trust Fund and established by riders. The City should maintain the required bid documentation from all bidders. The City should ensure that vendors do not exceed their contracted amounts and that amended contracts are approved before purchased orders are issued. The City should properly maintain and ensure all contracts are current. The City should maintain complete voucher packages with supporting documentation. The City awards contracts to professional services firms with a not-to-exceed amount. In these situations, the City should encumber the full amount of the contract to avoid awarding contracts throughout the year that could result in overexpending the respective budget appropriation. 2

7 The City should obtain and review subrecipient audit reports to determine whether there were any findings or questioned costs related to the CDBG program. The City should ensure all documents are carefully prepared and reviewed before they are submitted to HUD in order to avoid submitting reports with mathematical errors. As the City is ultimately responsible for the documentation related to the inspections of HUD-subsidized units as the administrator of the Section 8 Program, the City should ensure the inspection reports are maintained at the City and not just at the respective sites. As the City is ultimately responsible for the documentation related to the eligibility requirements for recipients that participate in the Section 8 Program, the City should ensure such documentation be maintained at the City and not just at the respective sites. The City should prepare a detailed policies and procedures grants manual. This document should describe the necessary steps to record all grant activity, maintenance of grant documents and reporting of grant application activity to the Administrator as well as Department Heads who are responsible for compliance with the respective grant. The City should ensure cash collections from outside offices be transmitted to the Division of Finance within 48 hours of receipt. The City should develop and implement a process to communicate all employee changes to the Information Technology manager to ensure that all computer access be properly granted or removed. The City should reconcile the state aid payments remitted to the trustee bank to the debt service requirements for the respective fiscal year. 3

SUMMARY OR SYNOPSIS OF AUDIT REPORT FOR PUBLICATION

SUMMARY OR SYNOPSIS OF AUDIT REPORT FOR PUBLICATION Attention is directed to the fact that a summary or synopsis of the audit report, together with the recommendations, is the minimum required to be published