BOROUGH OF NATIONAL PARK REPORT OF AUDIT YEAR ENDED DECEMBER 31, 2016

Transcription

1 BOROUGH OF NATIONAL PARK REPORT OF AUDIT YEAR ENDED DECEMBER 31, 2016

2 INDEX Page PART I 1 Independent Auditor's Report 2-4 CURRENT FUND 5 A Comparative Balance Sheet - Current Fund - Regulatory Basis 6-7 A-1 Comparative Statement of Operations and Change in Fund Balance - Current Fund - Regulatory Basis 8 A-2 Statement of Revenues - Current Fund - Regulatory Basis 9 A-3 Statement of Expenditures - Current Fund - Regulatory Basis TRUST FUND 14 B Comparative Balance Sheet - Trust Fund - Regulatory Basis 15 GENERAL CAPITAL FUND 16 C Comparative Balance Sheet - General Capital Fund - Regulatory Basis 17 C-1 Schedule of Fund Balance - General Capital Fund 17 WATER & SEWER UTILITY FUND 18 D Comparative Balance Sheet - Water & Sewer Utility Fund - Regulatory Basis D-1 Schedule of Fund Balance - Water & Sewer Capital Fund 20 D-2 Comparative Statement of Operations and Change in Fund Balance - Water & Sewer Utility Fund - Regulatory Basis 21 D-3 Statement of Revenues - Water & Sewer Utility Fund - Regulatory Basis 22 D-4 Statement of Expenditures - Water & Sewer Utility Fund - Regulatory Basis 23 GENERAL FIXED ASSETS 24 E Comparative Balance Sheet - General Fixed Assets - Regulatory Basis 25 NOTES TO FINANCIAL STATEMENTS - Regulatory Basis SCHEDULES RELATED TO ACCOUNTING AND REPORTING FOR PENSIONS (GASB 68 & GASB 71) 45 F-1 Schedule of the Borough s Proportionate Share of the Net Pension Liability - PERS 46 F-2 Schedule of Borough Contributions - PERS 47 SUPPLEMENTARY INFORMATION 48 Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed In Accordance with Government Auditing Standards 49-50

3 INDEX (CONTINUED) Page CURRENT FUND 51 A-4 Schedule of Current Fund Cash - Chief Financial Officer 52 A-5 Schedule of Current Fund Cash - Collector 53 A-6 Schedule of Grants Receivable 54 A-7 Schedule of Due to State of New Jersey - Senior Citizen and Veterans Deductions 55 A-8 Schedule of Taxes Receivable and Analysis of Property Tax Levy A-9 Schedule of Tax Title Liens Receivable 58 A-10 Schedule of Property Acquired for Taxes (At Assessed Valuation) 58 A-11 Schedule of Revenue Accounts Receivable 59 A-12 Schedule of Appropriation Reserves 60 A-13 Schedule of Encumbrances Payable 61 A-14 Schedule of Local District School Tax Payable 62 A-15 Schedule of Regional High School Tax Payable 63 A-16 Schedule of Reserve for Grants - Appropriated 64 A-17 Schedule of Reserve for Grants - Unappropriated 65 TRUST FUND 66 B-1 Schedule of Trust Fund Cash - Chief Financial Officer 67 B-2 Schedule of Trust Fund Cash - Collector 68 B-3 Schedule of Reserve for Dog Fund Expenditures 68 B-4 Schedule of Reserve for Tax Sale Premiums 69 GENERAL CAPITAL FUND 70 C-2 Schedule of General Capital Fund Cash - Chief Financial Officer 71 C-3 Analysis of General Capital Fund Cash 72 C-4 Schedule of Deferred Charges to Future Taxation - Unfunded 73 C-5 Schedule of Capital Improvement Fund 74 C-6 Schedule of Improvement Authorizations 75 C-7 Schedule of Bond Anticipation Notes 76 C-8 Schedule of Bonds Authorized But Not Issued 77 C-9 Schedule of Obligations Under Capital Leases 78 WATER & SEWER UTILITY FUND 79 D-5 Schedule of Water and Sewer Utility Fund Cash - Chief Financial Officer 80 D-6 Schedule of Water and Sewer Utility Fund Cash - Collector 81 D-7 Analysis of Water and Sewer Utility Capital Cash 82 D-8 Schedule of Consumer Accounts Receivable 83 D-9 Schedule of Water and Sewer Utility Liens Receivable 83 D-10 Schedule of Fixed Capital 84 D-11 Schedule of Fixed Capital Authorized and Uncompleted 85 D-12 Schedule of Appropriation Reserves 86 D-13 Schedule of Encumbrances Payable 86 D-14 Schedule of Accounts Payable 87 D-15 Schedule of Capital Improvement Fund 87 D-16 Schedule of Reserve for Amortization 87 D-17 Schedule of Accrued Interest on Bonds and Analysis of Balance 88

4 INDEX (CONTINUED) Page WATER & SEWER UTILITY FUND (CONTINUED) D-18 Schedule of Improvement Authorizations 89 D-19 Schedule of Loans Payable 90 D-20 Schedule of Bond Anticipation Notes 91 D-21 Schedule of Deferred Reserve for Amortization 92 D-22 Schedule of Bonds & Notes Authorized But Not Issued 93 PART II Letter of Comments and Recommendations 94 General Comments Other Comments 97 Status of Prior Recommendations 98 Findings and Recommendations 98

5 PART I 1

6 PETRONI & ASSOCIATES LLC Certified Public Accountants Registered Municipal Accountants MEMBER: AMERICAN INSTITUTE OF 102 West High Street, Suite 100 P.O. Box 279 Glassboro, NJ CERTIFIED PUBLIC ACCOUNTANTS (856) Fax (856) Nick L. Petroni, CPA, RMA Honorable Mayor and Members of the Borough Council Borough of National Park 7 South Grove Avenue National Park, New Jersey INDEPENDENT AUDITOR S REPORT Mary A. Carey, RMA Wendy G. Fama, CPA Denise R. Nevico, CPA Jeffrey T. Ridgway, CPA Deanna L. Roller, CPA, RMA Report on the Financial Statements We have audited the accompanying balance sheets - regulatory basis of the various funds and account group of the Borough of National Park, as of December 31, 2016 and 2015, the related statement of operations and changes in fund balance - regulatory basis for the years then ended, and the related statement of revenues - regulatory basis and statement of expenditures - regulatory basis of the various funds for the year ended December 31, 2016, and the related notes to the financial statements, which collectively comprise the Borough of National Park s basic financial statements as listed in the table of contents. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the basis of accounting prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatements, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America, the audit requirements prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey (the Division ), and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 2

7 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles As described in Note 1 of the financial statements, the financial statements are prepared by the Borough of National Park on the basis of the financial reporting provisions prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey, which is a basis of accounting other than accounting principles generally accepted in the United States of America, to meet the requirements of New Jersey. The effects on the financial statements of the variances between the regulatory basis of accounting described in Note 1 and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material. Adverse Opinion on U.S. Generally Accepted Accounting Principles In our opinion, because of the significance of the matter discussed in the Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles paragraph, the financial statements referred to above do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of each fund of the Borough of National Park as of December 31, 2016 and 2015, or changes in financial position for the years then ended. Opinion on Regulatory Basis of Accounting In our opinion, the financial statements referred to above present fairly, in all material respects, the regulatory basis balance sheets and account group as of December 31, 2016 and 2015, the regulatory basis statements of operations for the years then ended and the regulatory basis statements of revenues and expenditures for the year ended December 31, 2016, in accordance with the basis of financial reporting prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey as described in Note 1. Other Matters Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Borough of National Park s basic financial statements. The supplementary information listed in the table of contents and the letter of comments and recommendations section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The supplemental information listed in the table of contents is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplemental information listed in the table of contents is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The letter of comments and recommendations section has not been subject to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. 3

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9 CURRENT FUND 5

10 COMPARATIVE BALANCE SHEET - CURRENT FUND - REGULATORY BASIS EXHIBIT A Balance Balance ASSETS Ref. Dec. 31, 2016 Dec. 31, 2015 Regular Fund Cash - Current Fund A-4 $ 1,690, $ 1,633, Cash - Payroll A-4 4, , Cash - Collector A-5 203, , Petty Cash Change Fund ,898, ,669, Receivables and Other Assets with Full Reserves: Delinquent Property Taxes Receivable A-8 301, , Tax Title Liens Receivable A-9 175, , Property Acquired for Taxes - Assessed Valuation A-10 16, , Revenue Accounts Receivable A-11 19, , Due from Animal Control Trust Fund B 2, , Due from Tax Sale Premium Fund B Due from Landfill Escrow Trust B Due from General Capital Fund C Due from Federal and State Grant Fund 72, , , ,413, ,268, Federal and State Grant Fund Grants Receivable A-6 236, , Due from Current Fund A 176, , , $ 2,826, $ 2,716, The accompanying notes to the financial statements are an integral part of this statement. 6

11 COMPARATIVE BALANCE SHEET - CURRENT FUND - REGULATORY BASIS LIABILITIES, RESERVES, AND FUND BALANCE Regular Fund Liabilities: EXHIBIT A (Continued) Balance Balance Ref. Dec. 31, 2016 Dec. 31, 2015 Appropriation Reserves A-3:A-12 $ 232, $ 162, Encumbrances Payable 18, Due to State of New Jersey - Senior Citizen and Veterans Deductions A Prepaid Taxes A-5 43, , Tax Overpayments 12, , Payroll Taxes Payable 2, , Local District School Tax Payable A-14 58, , Regional High School Tax Payable A-15 15, Due County for Added & Omitted Taxes A-8 1, , Reserve for Insurance Proceeds Due State of New Jersey: Marriage License Construction DCA Fees Pension Payable 7, , Due Outside Lien Holder 2, , Due Utility Operating Fund D 1, , Due Accumulated Absence Trust Fund B Due Federal and State Grant Fund A 176, , , Reserve for Receivables 515, , Fund Balance A-1 1,342, ,376, ,413, ,268, Federal and State Grant Fund Reserve for Grants - Appropriated A , , Reserve for Grants - Unappropriated A-17 7, Due Current Fund 72, , , $ 2,826, $ 2,716, The accompanying notes to the financial statements are an integral part of this statement. 7

12 EXHIBIT A-1 COMPARATIVE STATEMENT OF OPERATIONS AND CHANGE IN FUND BALANCE - CURRENT FUND - REGULATORY BASIS Revenue and Other Income Realized Ref. Year 2016 Year 2015 Fund Balance Utilized A-2 $ 345, $ 332, Miscellaneous Revenue Anticipated A-2 835, ,050, Receipts from Delinquent Taxes A-2 325, , Receipts from Current Taxes A-2 6,117, ,065, Non-Budget Revenue A-2 30, , Other Credits to Income: Unexpended Balance of Appropriation Reserves A , , Interfund Loans Returned 74, , Reserve for Grants Appropriated Canceled A-16 68, Regulatory Excess - Animal Control Fund 3, Tax Overpayments Canceled 1, Reserve for Preparation of Tax Map Canceled 2, Reserve for Debt Service Canceled Total Income 7,930, ,235, Expenditures Budget Appropriations Within "CAPS" Operations: Salaries and Wages A-3 461, , Other Expenses A-3 944, , Deferred Charges and Statutory Expenditures A-3 116, , Budget Appropriations Excluded from "CAPS" Operations: Other Expenses A-3 550, , Capital Improvements A-3 258, , Debt Service A-3 120, , Deferred Charges County Taxes A-8 1,084, ,110, Due County for Added Taxes A-8 1, , Regional High School Tax A-15 1,841, ,812, Local District School Tax A-14 2,126, ,088, Interfund Loans Advanced 1, Reserve for Grants Receivable Canceled A-6 115, Prior Year Deduction Canceled Total Expenditures 7,619, ,687, Statutory Excess to Fund Balance 311, , Fund Balance Balance January 1 A 1,376, ,160, ,687, ,708, Decreased by: Utilization as Anticipated Revenue A-1 345, , Balance December 31 A $ 1,342, $ 1,376, The accompanying notes to the financial statements are an integral part of this statement. 8

13 EXHIBIT A-2 STATEMENT OF REVENUES - CURRENT FUND - REGULATORY BASIS Anticipated Special NJSA Excess or Ref. Budget 40A:4-87 Realized (Deficit) Fund Balance Anticipated A-1 $ 345, $ 345, Miscellaneous Revenues: Licenses: Alcoholic Beverages A-11 4, , $ Fees and Permits A-11 17, , , Interest and Costs on Taxes A-11 50, , , Rent - Radio Tower A-11 22, , , Energy Receipts Tax A , , Uniform Construction Code A-11 10, , , Municipal Alliance A-6 9, , NJ DOT A-6 $ 193, , Recycling Tonnage A-6 3, , Uniform Fire Safety Act A-11 2, , (290.95) Cable TV Franchise Fee A-11 38, , , Total Miscellaneous Revenues 588, , , , Receipts from Delinquent Taxes A-2 275, , , Subtotal General Revenues 1,208, , ,506, , Amount to be Raised by Taxation A-2 1,403, ,422, , Budget Totals 2,611, , ,929, $ 120, Non-Budget Revenue A-2 30, $ 2,611, $ 196, $ 2,959, Ref. A-3 A-3 Analysis of Realized Revenue Ref. Allocation of Current Tax Collections: Revenue from Collections A-8 $ 6,117, Allocated to: School and County Taxes A-8 5,053, Balance for Support of Municipal Budget Appropriation 1,064, Add: Appropriation "Reserve for Uncollected Taxes" A-3 358, Amount for Support of Municipal Budget Appropriation A-2 $ 1,422, Receipts from Delinquent Taxes: Delinquent Tax Collection A-8 $ 292, Tax Title Lien Collection A-9 33, A-2 $ 325, Analysis of Non-Budget Revenue Miscellaneous Revenue Not Anticipated: Revenue Accounts Receivable: Administrative Fee A-11 $ Interest on Investments A-11 4, Prior Year Voided Checks A Miscellaneous A-11 25, A-2 $ 30, The accompanying notes to the financial statements are an integral part of this statement. 9

14 EXHIBIT A-3 STATEMENT OF EXPENDITURES - CURRENT FUND - REGULATORY BASIS Appropriations Expended Unexpended Budget After Paid or Balance Budget Modifications Charged Reserved Canceled OPERATIONS WITHIN "CAPS" GENERAL GOVERNMENT Mayor and Council Salaries & Wages $ 5, $ 5, $ 5, Municipal Clerk's Office Salaries & Wages 126, , , $ 16, Other Expenses 21, , , , Financial Administration Salaries & Wages 15, , , Other Expenses 12, , , , Audit Services Other Expenses 22, , , , Collection of Taxes Salaries & Wages 40, , , , Other Expenses 4, , , Legal Services and Costs Other Expenses 12, , , , Engineering Services and Costs Other Expenses 68, , , , LAND USE ADMINISTRATION Municipal Land Use Law (NJSA 40:55D-1) Land Use Board Salaries and Wages 5, , , Other Expenses 3, , , , CODE ENFORCEMENT & ADMINISTRATION Other Code Enforcement Salaries and Wages 33, , , , Other Expenses INSURANCE Liability Insurance 96, , , Workmen's Compensation 38, , , Health Waiver Benefit 5, , , , Group Medical Insurance 160, , , , PUBLIC SAFETY FUNCTIONS Police Salaries and Wages 18, , , , Office of Emergency Management Salaries and Wages 2, , , Other Expenses The accompanying notes to the financial statements are an integral part of this statement. 10

15 EXHIBIT A-3 (Continued) STATEMENT OF EXPENDITURES - CURRENT FUND - REGULATORY BASIS Appropriations Expended Unexpended Budget After Paid or Balance Budget Modifications Charged Reserved Canceled Aid to Volunteer Fire Other Expenses 40, , , , PUBLIC WORKS FUNCTIONS Road Repairs and Maintenance Salaries and Wages 190, , , , Other Expenses 42, , , , Solid Waste Collection Other Expenses 150, , , , Public Buildings and Grounds Salaries and Wages 8, , , Other Expenses 6, , , Vehicle Maintenance Other Expenses 20, , , , HEALTH & HUMAN SERVICES Board of Health Salaries and Wages 1, , , Other Expenses PARK & RECREATION FUNCTIONS Recreation Programs Other Expenses Maintenance of Parks Other Expenses UTILITY EXPENSES & BULK PURCHASES Electricity 27, , , , Street Lighting 46, , , , Telephone 6, , , , Natural Gas 13, , , , Gasoline 19, , , , LANDFILL/SOLID WASTE DISPOSAL COSTS Landfill Disposal 138, , , , UNIFORM CONSTRUCTION CODE - APPROPRIATIONS OFFSET BY DEDICATED REVENUES (NJAC 5: ) Construction Official Salaries & Wages 27, , , , Other Expenses Total Operations Within "CAPS" 1,430, ,405, ,209, , Salaries & Wages 478, , , , Other Expenses 951, , , , The accompanying notes to the financial statements are an integral part of this statement. 11

16 EXHIBIT A-3 (Continued) STATEMENT OF EXPENDITURES - CURRENT FUND - REGULATORY BASIS Appropriations Expended Unexpended Budget After Paid or Balance Budget Modifications Charged Reserved Canceled DEFERRED CHARGES & STATUTORY EXPENDITURES Statutory Expenditures: Contribution to: Social Security System (OASI) 35, , , , Public Employees' Retirement System 50, , , , Police and Firemen's Retirement System 4, , , Unemployment Compensation Insurance (NJSA 43:21-3 et seq.) 2, , , Total Deferred Charges & Statutory Expenditures Within "CAPS" 91, , , , Total Appropriations Within "CAPS" 1,521, ,521, ,293, , OPERATIONS EXCLUDED FROM "CAPS Shared Service Agreements Township of West Deptford - Police Services Police - Other Expenses 535, , , PUBLIC & PRIVATE PROGRAMS OFFSET BY REVENUES Municipal Alliance on Alcoholism & Drug Abuse 11, , , Recycling Tonnage 3, , Total Operations Excluded from "CAPS" 546, , , Other Expenses 546, , , CAPITAL IMPROVEMENTS Purchase of a Leaf Machine 50, , , , Road Repairs 15, , , NJ Transportation Fund Authority Act 193, , Total Capital Improvements Excluded from "CAPS" 65, , , , The accompanying notes to the financial statements are an integral part of this statement. 12

17 EXHIBIT A-3 (Continued) STATEMENT OF EXPENDITURES - CURRENT FUND - REGULATORY BASIS Appropriations Expended Unexpended Budget After Paid or Balance Budget Modifications Charged Reserved Canceled DEBT SERVICE Payment of Bond Anticipation Notes 59, , , Interest on Notes 1, , , $ Capital Lease Obligations 59, , , Total Debt Service Excluded from "CAPS" 120, , , Total Appropriations Excluded from "CAPS" 731, , , , Subtotal General Appropriations 2,253, ,450, ,217, , RESERVE FOR UNCOLLECTED TAXES 358, , , $ 2,611, $ 2,808, $ 2,575, $ 232, $ Ref. A-2 A Ref. Budget A-3 $ 2,611, Appropriations by 40A:4-87 A-2 196, $ 2,808, Ref. Reserve for Uncollected Taxes A-2 $ 358, Reserve for Federal & State Grants - Appropriated A , Disbursed A-4 $ 2,009, ,575, The accompanying notes to the financial statements are an integral part of this statement. 13

18 TRUST FUND 14

19 COMPARATIVE BALANCE SHEET - TRUST FUND - REGULATORY BASIS ASSETS EXHIBIT B Balance Balance Ref. Dec. 31, 2016 Dec. 31, 2015 Animal Control Trust Fund Cash - Chief Financial Officer B-1 $ 11, $ 13, Tax Sale Premium Fund Cash - Collector B-2 66, , Unemployment Compensation Fund Cash - Chief Financial Officer B-1 3, , Accumulated Absence Trust Due from Current Fund A Playground Donations Trust Cash - Chief Financial Officer B-1 6, , Landfill Escrow Cash - Chief Financial Officer B $ 87, $ 152, LIABILITIES, RESERVES, AND FUND BALANCE Animal Control Trust Fund Due Current Fund A $ 2, $ 4, Reserve for Dog Fund Expenditures B-3 8, , , , Tax Sale Premium Fund Due Current Fund A Reserve for Tax Sale Premiums B-4 66, , , , Unemployment Compensation Fund Reserve for Unemployment Claims 3, , Accumulated Absence Trust Reserve for Accumulated Absences Playground Donations Trust Reserve for Donations 6, , Landfill Escrow Due Current Fund A $ 87, $ 152, The accompanying notes to the financial statements are an integral part of this statement. 15

20 GENERAL CAPITAL FUND 16

21 EXHIBIT C COMPARATIVE BALANCE SHEET - GENERAL CAPITAL FUND - REGULATORY BASIS ASSETS Balance Balance Ref. Dec. 31, 2016 Dec. 31, 2015 Cash - Chief Financial Officer C-2 $ 14, $ 14, Deferred Charges to Future Taxation: Unfunded C-4 145, , Due from Utility Capital Fund D 20, , Amount to be Provided by Lease Payments C-9 489, , $ 669, $ 798, LIABILITIES, RESERVES, AND FUND BALANCE Bond Anticipation Notes Payable C-7 $ 121, $ 181, Improvement Authorizations: Funded C-6 36, Unfunded C-6 4, , Capital Improvement Fund C-5 6, , Reserve for Improvements to Roads 10, , Reserve for River Front Development 0.16 Due Current Fund A Obligations Under Capital Leases C-9 489, , Fund Balance C-1 1, $ 669, $ 798, EXHIBIT C-1 STATEMENT OF FUND BALANCE - GENERAL CAPITAL FUND - REGULATORY BASIS Ref. Balance December 31, 2015 C $ Increased by: Improvements Authorizations Canceled C-6 $ 1, Reserve for Riverfront Development Canceled C , Balance December 31, 2016 C $ 1, The accompanying notes to the financial statements are an integral part of this statement. 17

22 WATER & SEWER UTILITY FUND 18

23 EXHIBIT D COMPARATIVE BALANCE SHEET - WATER & SEWER UTILITY FUND - REGULATORY BASIS ASSETS Balance Balance Ref. Dec. 31, 2016 Dec. 31, 2015 Operating Fund Cash - Chief Financial Officer D-5 $ 704, $ 646, Cash - Sewer Utility Collector D-6 1, Cash - Water Utility Collector D-6 13, Cash - Change Fund Due from Current Fund A 1, , Due from Utility Capital Fund D , , , Receivables with Full Reserves: Consumer Accounts Receivable D-8 176, , Water & Sewer Liens D-9 4, , , , Total Operating Fund 903, , Capital Fund Cash - Chief Financial Officer D-5 34, Fixed Capital D-10 5,766, ,038, Fixed Capital Authorized and Uncompleted D , ,629, Total Capital Fund 5,951, ,668, $ 6,854, $ 7,605, The accompanying notes to the financial statements are an integral part of this statement. 19

24 EXHIBIT D (Continued) COMPARATIVE BALANCE SHEET - WATER & SEWER UTILITY FUND - REGULATORY BASIS LIABILITIES, RESERVES, AND FUND BALANCE Balance Balance Ref. Dec. 31, 2016 Dec. 31, 2015 Operating Fund Liabilities: Appropriation Reserves D-4:D-12 $ 91, $ 87, Encumbrances Payable D , Accounts Payable 52, Accrued Interest on Bonds D-17 5, , Utility Rent Overpayments 4, , , , Reserve for Receivables 181, , Fund Balance D-2 619, , Total Operating Fund 903, , Capital Fund Cash Deficit - Chief Financial Officer 6, Loan Payable D-19 3,348, ,443, Bond Anticipation Notes D , , Improvement Authorizations: Funded 4, Unfunded D-18 3, , Capital Improvement Fund D Due Utility Operating Fund D , Due General Capital Fund C 20, , Deferred Reserve for Amortization D-21 14, , Reserve for Amortization D-16 2,316, ,193, Fund Balance D-1 11, Total Capital Fund 5,951, ,668, $ 6,854, $ 7,605, SCHEDULE OF FUND BALANCE - WATER & SEWER CAPITAL FUND EXHIBIT D-1 Ref. Increased by: Improvement Authorizations - Canceled D-18 $ 11, Balance December 31, 2016 D $ 11, The accompanying notes to the financial statements are an integral part of this statement. 20

25 EXHIBIT D-2 COMPARATIVE STATEMENT OF OPERATIONS AND CHANGE IN FUND BALANCE - WATER & SEWER UTILITY FUND - REGULATORY BASIS Revenue and Other Income Realized Ref. Year 2016 Year 2015 Fund Balance Anticipated D-3 $ 84, $ 79, Water Rents D-3 444, , Sewer Rents D-3 466, , Miscellaneous D-3 20, , Other Credits to Income: Unexpended Balance of Appropriation Reserves D-12 50, , Total Income 1,065, ,081, Expenditures Operating D-4 690, , Capital Improvements D-4 15, , Debt Service D-4 206, , Deferred Charges and Statutory Expenditures D-4 16, , Total Expenditures 927, , Statutory Excess to Fund Balance 137, , Fund Balance Balance January 1 D 565, , , , Decreased by: Utilization as Anticipated Revenue D-2 84, , Balance December 31 D $ 619, $ 565, The accompanying notes to the financial statements are an integral part of this statement. 21

26 EXHIBIT D-3 STATEMENT OF REVENUES - WATER & SEWER UTILITY FUND - REGULATORY BASIS Anticipated Excess or Budget Realized (Deficit) Fund Balance Anticipated $ 84, $ 84, Water Rents 395, , $ 49, Sewer Rents 435, , , Miscellaneous 15, , , $ 929, $ 1,015, $ 86, Ref. D-4 Analysis of Realized Revenue Ref. Water Sewer Rents: Consumer Accounts Receivable: Collected D-8 $ 439, $ 463, Overpayments Applied D-8 3, , Utility Liens D , D-3 $ 444, $ 466, Miscellaneous: Penalties D-6 $ 18, Interest on Investments D-5:D-6 1, Miscellaneous D D-3 $ 20, The accompanying notes to the financial statements are an integral part of this statement. 22

27 EXHIBIT D-4 STATEMENT OF EXPENDITURES - WATER & SEWER UTILITY FUND - REGULATORY BASIS Appropriations Expended Unexpended Budget After Paid or Balance Budget Modification Charged Encumbered Reserved Canceled Operating: Salaries and Wages $ 185, $ 185, $ 135, $ 49, Other Expenses 505, , , $ , Capital Improvements: Capital Outlay 15, , , Debt Service: Payment of Loan Principal 94, , , $ Payment of Bond Anticipation Notes 30, , , Interest on Loans 80, , , Interest on Notes 2, , , Deferred Charges and Statutory Expenditures: Statutory Expenditures: Social Security System (OASI) 16, , , , Unemployment Compensation $ 929, $ 929, $ 835, $ $ 91, $ 1, Ref. D-3 D-3 D-13 D Ref. Interest on Bonds D-17 $ 79, Disbursed D-5 756, $ 835, The accompanying notes to the financial statements are an integral part of this statement. 23

28 GENERAL FIXED ASSETS 24

29 EXHIBIT E COMPARATIVE BALANCE SHEET - GENERAL FIXED ASSETS - REGULATORY BASIS Balance Balance Dec. 31, 2016 Dec. 31, 2015 General Fixed Assets: Land and Improvements $ 98, $ 98, Buildings 243, , Machinery and Equipment 385, , Office Furniture and Equipment 94, , Vehicles 846, , Special Properties 6, , $ 1,674, $ 1,543, Investment in General Fixed Assets $ 1,674, $ 1,543, The accompanying notes to the financial statements are an integral part of this statement. 25

30 NOTES TO FINANCIAL STATEMENTS (Regulatory Basis) 26

31 BOROUGH OF NATIONAL PARK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 AND 2015 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity The Borough of National Park was incorporated in 1902 and is located in Gloucester County, New Jersey. The Borough is governed by an elected Mayor and six elected Council Representatives. The Borough is managed daily by the Borough Administrator. Except as noted below, the financial statements of the Borough of National Park included every board, body, officer or commission supported and maintained wholly or in part by funds appropriated by the Borough of National Park, as required by NJSA 40A:5-5. Component units are legally separate organizations for which the Borough is financially accountable. The Borough is financially accountable for an organization if the Borough appoints a voting majority of the organization s governing board and (1) the Borough is able to significantly influence the programs or services performed or provided by the organization; or (2) the Borough is legally entitled to or can otherwise access the organization s resources; the Borough is legally obligated or has otherwise assumed the responsibility to finance the deficits of or provide financial support to the organization; or the Borough is obligated for the debt of the organization. Component units may also include organizations that are fiscally dependent on the Borough in that the Borough approves the budget, the issuance of debt or the levying of the taxes. The Borough has no component units. B. Description of Funds and Account Groups The accounting policies of the Borough of National Park conform to the accounting principles applicable to municipalities which have been prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey. Such principles and practices are designed primarily for determining compliance with legal provisions and budgetary restrictions and as a means of reporting on the stewardship of public officials with respect to public funds. Under this method of accounting, the Borough of National Park accounts for its transactions through the following separate funds and accounts as presented below. This presentation differs from the three funds; two account group presentation as required by GAAP. Current Fund - Resources and expenditures for governmental operations of a general nature, including Federal and State Grant Funds. Trust Fund - Receipts, custodianship and disbursement of funds in accordance with the purpose for which each reserve was created. General Capital Fund - Receipt and disbursement of funds for the acquisition of general capital facilities, other than those acquired in the Current Fund. In addition, the fund is used to track the status of debt authorized for capital projects. Water and Sewer Operating and Capital Funds - Account for the operations and acquisition of capital facilities of the municipally owned Water and Sewer Utility. Payroll Account Receipt and disbursement of funds to meet obligations to employees and payroll tax liabilities. 27

32 BOROUGH OF NATIONAL PARK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 AND 2015 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) General Fixed Assets - All fixed assets used in governmental fund type operations are accounted for in the General Fixed Asset account group, rather than in Governmental Funds. C. Basis of Accounting The accounting principles and practices prescribed for municipalities in the State of New Jersey differ in certain respects from accounting principles generally accepted in the United States of America applicable to local governmental units. The more significant policies in New Jersey follow. A modified accrual basis of accounting is followed with minor exceptions. Revenues - are recorded when received in cash except for certain amounts which are due from other governmental units. Receipts from Federal and State grants are realized as revenue when anticipated in the Borough budget. Receivables for property taxes are recorded with offsetting reserves on the balance sheet of the Borough s Current Fund; accordingly, such amounts are not recorded as revenue until collected. Other amounts that are due the Borough which are susceptible to accrual are also recorded as receivables with offsetting reserves and recorded as revenue when received. Fund balance utilized to balance the budget is recorded as revenue and budgeted transfers from other funds are also recorded as revenue when anticipated in the budget. This method of revenue recognition differs from accounting principles generally accepted in the United States of America which recognizes revenue in the accounting period in which it is earned net of allowances for doubtful accounts. Expenditures - are recorded on the budgetary basis of accounting. Generally, expenditures are recorded when an amount is encumbered for goods and services through the issuance of a purchase order in conjunction with the Encumbrance Accounting System. Outstanding encumbrances at December 31 are reported as a cash liability in the financial statements and constitute part of the Borough s statutory Appropriation Reserve balance. Appropriation reserves covering unexpended appropriation balances are automatically created at December 31 of each year and recorded as liabilities, except for amounts which may be canceled by the governing body. Appropriation reserves are available until lapsed at the close of the succeeding year, to meet specific claims, commitments or contracts incurred during the preceding fiscal year. Lapsed appropriation reserves are recorded as income. Grant appropriations are charged upon budget adoption to create separate spending reserves. Budgeted transfers to other funds are recorded as expenditures when the budget is adopted to the extent permitted or required by law. Appropriations for principal payments on outstanding general capital and utility capital bonds and notes are provided on the cash basis; interest on general capital indebtedness is on the cash basis while interest on utility capital indebtedness is on the accrual basis. This method differs from accounting principles generally accepted in the United States of America which requires that expenditures be recorded when services are rendered or goods are received. Under accounting principles generally accepted in the United States of America appropriation reserves do not exist and encumbrances do not constitute expenditures. Property Taxes - The County Board of Taxation certifies the tax levy of the municipality each year. The tax levy is based on the assessed valuation of taxable property within the municipality. Taxes are payable on the first day of February, May, August, and November. Any taxes that have not been paid by the 11 th day of the 11 th month in the year levied are subject to 28

33 BOROUGH OF NATIONAL PARK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 AND 2015 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Basis of Accounting (Continued) Property Taxes (Continued) - being included in the tax sale and the lien enforced by selling the property in accordance with NJSA 54:5 et seq. The municipality is responsible for remitting 100% of the school and county taxes to the respective agency. The loss for delinquent or uncollectible accounts is borne by the municipality and not the school district or county. The inclusion of the Reserve for Uncollected Taxes appropriation in the Borough s annual budget protects the Borough from those taxes not paid. The minimum amount of the reserve is determined by the percentage of collections experienced in the preceding year, and is required to provide assurance that cash collected in the current year will provide sufficient cash flow to meet expected obligations. Under accounting principles generally accepted in the United States of America, a Reserve for Uncollected Taxes would not be an appropriation. Interest on Delinquent Taxes - It is the policy of the Borough to collect interest for the nonpayment of taxes or assessments on or before the date when they would become delinquent. The Tax Collector is authorized to charge eight percent (8%) per annum on the first $1, of taxes becoming delinquent after due date and eighteen percent (18%) per annum on any amount of taxes in excess of $1, becoming delinquent after due date and if a delinquency is in excess of $10, and remains in arrears beyond December 31 st, an additional penalty of six percent (6%) shall be charged against the delinquency. There is a ten day grace period. Foreclosed Property - Foreclosed property is recorded in the Current Fund at the assessed valuation when such property was acquired and is fully reserved. Under accounting principles generally accepted in the United States of America foreclosed property would be recorded at historical cost and no reserve would be provided. Interfunds - Interfund receivables in the Current Fund are recorded with offsetting reserves which are created by charges to operations. Income is recognized in the year the receivables are liquidated. Interfund receivables in the other funds are not offset by reserves. Under accounting principles generally accepted in the United States of America interfunds are not reserved. Insurance - Cost of insurance for all funds are recorded as expenditures at the time of payment. Under accounting principles generally accepted in the United States of America insurance costs chargeable to future periods would be recorded as prepayments on the balance sheet. Inventories of Supplies - The costs of inventories of supplies for all funds are recorded as expenditures at the time individual items are purchased. The costs of inventories are not included on the various balance sheets. Under accounting principles generally accepted in the United States of America inventory would be recorded as an asset on the balance sheet. Proprietary Fund - Cash Flows Statement - In accordance with the reporting requirements of the Division of Local Government Services, the utility fund s financial statements do not include a statement of cash flows. 29

34 BOROUGH OF NATIONAL PARK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 AND 2015 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Basis of Accounting (Continued) Capitalization of Interest - It is the policy of the Borough to capitalize interest in the Utility Capital Fund on projects during the construction phase. General Fixed Assets - In accordance with NJAC 5:30-5.6, Accounting for Governmental Fixed Assets, as promulgated by the Division of Local Government Services, which differs in certain respects from generally accepted accounting principles, the Borough has developed a fixed asset accounting and reporting system. As required by New Jersey Statutes, foreclosed property is reported in the current operating fund of the municipality. Fixed assets used in governmental operations (general fixed assets) are accounted for in the General Fixed Assets Account Group. Public domain ( infrastructure ) general fixed assets consisting of certain improvements other than buildings, such as roads, bridges, curbs and gutters, streets and sidewalks, and drainage systems are not capitalized. All fixed assets are recorded at historical cost or estimated historical cost if actual historical cost is not available except for land, which is valued at estimated market value on the date of acquisition. The Borough capitalizes fixed assets with an original cost in excess of $1, No depreciation has been provided for in the financial statements. Expenditures for construction in progress are recorded in the Capital Funds until such time as the construction is completed and put into operation. Fixed assets acquired through grants in aid or contributed capital has not been accounted for separately. Property and equipment purchased by the Water and Sewer Utility Fund are recorded in the respective capital account at cost and are adjusted for dispositions and abandonment. Contributions in aid of construction are not capitalized. The balances in Reserve for Amortization and Deferred Reserve for Amortization accounts in the Utility Capital Fund represent charges to operations for the costs of acquisition of property, equipment and improvements. The utility does not record depreciation on fixed assets. General Long-Term Debt - General Long-Term Debt is accounted for in the General Capital and Utility Capital Fund. Accounting principles generally accepted in the United States of America require General Long-Term Debt to be accounted for in the General Long-Term Debt Account Group. Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America or the regulatory basis of accounting requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. 30

35 BOROUGH OF NATIONAL PARK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 AND 2015 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Tax Appeals and Other Contingent Losses - Losses which arise from tax appeals and other contingent losses are recognized at the time an unfavorable decision is rendered by an administrative or judicial body. D. Comparative Data Comparative total data for the prior year has been presented in the accompanying Balance Sheets and Statement of Operations in order to provide an understanding of changes in the Borough s financial position. However, comparative (i.e. presentation of prior year totals by fund type) data have not been presented in the statement of revenues - regulatory basis and the statement of expenditures - regulatory basis since their inclusion would make the statements unduly complex and difficult to read. E. Recent Accounting Pronouncements Not Yet Effective In June 2015, the Governmental Accounting Standards Board (GASB) issued Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements No. 67 and No. 68. This statement, which is effective for fiscal periods beginning after June 15, 2016, will not have any effect on the Borough s financial reporting. In June 2015, the Governmental Accounting Standards Board (GASB) issued Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans. This statement, which is effective for fiscal periods beginning after June 15, 2016, will not have any effect on the Borough s financial reporting. In June 2015, the Governmental Accounting Standards Board (GASB) issued Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. This statement, which is effective for fiscal periods beginning after June 15, 2017, will not have any effect on the Borough s financial reporting. In January 2016, the Governmental Accounting Standards Board (GASB) issued Statement No. 80, Blending Requirements for Certain Component Units an amendment of GASB Statement No. 14. This statement, which is effective for fiscal periods beginning after June 15, 2016, will not have any effect on the Borough s financial reporting. In January 2016, the Governmental Accounting Standards Board (GASB) issued Statement No. 81, Irrevocable Split-Interest Agreements. This statement, which is effective for fiscal periods beginning after December 15, 2016, will not have any effect on the Borough s financial reporting. In March 2016, the Governmental Accounting Standards Board (GASB) issued Statement No. 82, Pension Issues an amendment of GASB Statements No. 67, No. 68, and No. 73. This statement, which is effective for fiscal periods beginning after June 15, Although not determinable, the impact of this statement on Borough s financial reporting is not anticipated to be significant. In November 2016, the Governmental Accounting Standards Board (GASB) issued Statement No. 83, Certain Asset Retirement Obligations. This statement, which is effective for fiscal periods beginning after June 15, 2018, will not have any effect on the Borough s financial reporting. 31

36 BOROUGH OF NATIONAL PARK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 AND 2015 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E. Recent Accounting Pronouncements Not Yet Effective (Continued) In January 2017, the Governmental Accounting Standards Board (GASB) issued Statement No. 84, Fiduciary Activities. This statement, which is effective for fiscal periods beginning after December 31, 2018, will not have any effect on the Borough s financial reporting. In March 2017, the Governmental Accounting Standards Board (GASB) issued Statement No. 85, Omnibus This statement, which is effective for fiscal periods beginning after June 15, 2017, will not have any effect on the Borough s financial reporting. NOTE 2: BUDGETARY INFORMATION The Borough must adopt an annual budget in accordance with NJSA 40A:4 et seq. This budget is required to be a balanced cash basis document. To accomplish this, the municipality is required to establish a reserve for uncollected taxes. The 2016 and 2015 budgets included a reserve for uncollected taxes in the amount of $358, and $339, This protects the Borough from taxes not paid currently. Once approved, the Borough may make emergency appropriations for a purpose which is not foreseen at the time the budget is adopted per NJSA 40A:4-46 and 54. This type of appropriation shall be made to meet a pressing need for public expenditure to protect or promote the public health, safety or welfare prior to the next succeeding fiscal year. Emergency appropriations, except those classified as a special emergency, must be raised in the budget of the succeeding year. Special emergency appropriations are permitted to be raised in the budgets of the succeeding three or five years. Budget transfers between appropriation accounts are prohibited until the last two months of the year. Budget transfers during the year were not significant. After approval from the Director, the Borough can also make amendments for any special item of revenue made available by any public or private funding source as per NJSA 40A:4-87. The Borough amended the budget during the year by the insertion of Special Items of Revenues in the amount of $196, for various grants as detailed on Exhibit A-2. NOTE 3: CASH Custodial Credit Risk - Deposits Custodial Credit Risk is the risk that in the event of a bank failure, the government s deposits may not be able to recover the value of its deposits or investments. Deposits are considered to be exposed to Custodial Credit Risk if they are: uncollateralized (securities not pledged to the depositor), collateralized with securities held by the pledging financial institution, or collateralized with securities held by the financial institution s trust department or agent but not in the government s name. The municipality s policy is based on New Jersey Statutes requiring cash to be deposited only in New Jersey based banking institutions that participate in the New Jersey Governmental Unit Deposit Protection Act (GUDPA) or in qualified investments established in NJSA 40A:5-15.1(a) that are treated as cash equivalents. At December 31, 2016 and 2015, the carrying amount of the Borough s deposits was $2,754, and $2,477,087.33, respectively. As of December 31, 2016 and 2015, $0 of the municipality s bank balance of $2,769, and $2,466,697.77, respectively, was exposed to Custodial Credit Risk. 32

37 NOTE 4: INVESTMENTS BOROUGH OF NATIONAL PARK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 AND 2015 As of December 31, 2016 and 2015, the Borough had no investments. Interest Rate Risk - The Borough does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. However, NJSA 40A:5-15.1(a) limits the length of time for most investments to 397 days. Credit Risk - NJSA 40A:5-15.1(a) limits municipal investments to those specified in the statues. The type of allowable investments are Bonds or other obligations of the United States or obligations guaranteed by the United States; Bonds or other obligations of the Borough or Bonds or other obligations of the Borough school district; Bonds or other obligations, having a maturity date not more than 397 days from the date of purchase, approved by the Division of Investment of the Department of Treasury for investment by local units, Government Money Market Mutual Funds; the State of New Jersey Cash Management Plan; local government investment pools; or repurchase of fully collateralized securities. Concentration of Credit Risk - The Borough places no limit on the amount the Borough may invest in any one issuer. NOTE 5: FUND BALANCES APPROPRIATED Fund balances which were appropriated and included as anticipated revenue in their own respective funds for the years ending December 31 were as follows: Budget of Balance Succeeding Year December 31 Year 2016 $ 1,342, $ 348, ,376, , Current ,160, , ,157, , ,113, , , , , , Utility , , , , , , NOTE 6: DEFERRED CHARGES TO BE RAISED IN SUCCEEDING BUDGETS At December 31, 2016, there are no deferred charges shown on the balance sheets of the various funds. 33

38 BOROUGH OF NATIONAL PARK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 AND 2015 NOTE 7: ACCUMULATED ABSENCE BENEFITS Borough employees are granted vacation benefits in varying amounts depending on their length of service with the Borough. All employees are granted five sick days per year. The Borough does not permit employees to accrue unused vacation and sick pay. NOTE 8: POST-EMPLOYMENT BENEFITS In July 2004, the Governmental Accounting Standards Board (GASB) adopted Statement No. 45, Accounting and Financial Reporting by Employers for Post-Employment Benefits Other than Pensions. This statement is effective for entities on a phased in basis beginning with fiscal years beginning after December 15, The effective date for this entity is calendar year beginning January 1, This statement will require governmental entities to report the future cost of other post-employment benefits (OPEB) on a present value basis instead of the present pay as you go method. The Borough does not provide for any post-retirement benefits to retirees. NOTE 9: FIXED ASSETS The following is a summary of changes in the General Fixed Assets Account Group for the year ended December 31, 2016: Balance Balance Dec. 31, 2015 Additions Deletions Dec. 31, 2016 Land and Improvements $ 98, $ 98, Buildings 243, , Machinery and Equipment 253, $ 131, , Office Furniture and Equipment 94, , Vehicles 846, , Special Properties 6, , $ 1,543, $ 131, None $ 1,674, NOTE 10: INTERFUND RECEIVABLES AND PAYABLES The amount due from the Federal and State Grant Fund to the Current Fund is due to the fact that there is no grant bank account. The amount due from the Utility Operating Fund to the Current Fund has carried from prior years and will be liquidated in the coming year. The following schedule reconciles interfund receivables and payables for the year ended December 31, 2016: 34

39 BOROUGH OF NATIONAL PARK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 AND 2015 NOTE 10: INTERFUND RECEIVABLES AND PAYABLES (CONTINUED) Due From Due To Current Fund: Animal Control Trust $ 2, Tax Sale Premium Fund Landfill Escrow Trust 0.37 General Capital Fund Federal and State Grant Fund $ 176, Utility Operating Fund 1, Accumulated Absence Trust Fund Federal and State Grant Fund Current Fund 176, Animal Control Trust Current Fund 2, Tax Sale Premium Fund Current Fund Accumulated Absence Trust Fund Current Fund Landfill Escrow Trust Current Fund 0.37 General Capital Fund Utility Capital Fund 20, Current Fund Utility Operating Fund Utility Capital Fund Current Fund 1, Utility Capital Fund General Capital Fund 20, Utility Operating Fund $ 201, $ 201, NOTE 11: LONG-TERM DEBT Long-term debt as of December 31, 2016, consisted of the following: Year Bonds, Notes, and Loans Issued $ 3,707, $ 3,790, $ 4,036, Bonds and Notes Authorized But Not Issued 23, ,075, ,317, Net Bonds, Notes, and Loans Issued and Authorized But Not Issued $ 3,731, $ 4,866, $ 5,353,

40 BOROUGH OF NATIONAL PARK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 AND 2015 NOTE 11: LONG-TERM DEBT (CONTINUED) During the calendar year 2016, the following changes occurred in the municipal debt of the Borough: Balance Issued/ Retired/ Balance Due Within Dec. 31, 2015 Authorized Reductions Dec. 31, 2016 One Year Issued: General Capital Fund: Bond Anticipation Notes $ 181, $ 59, $ 121, $ 70, Utility Capital Fund: Bonds and Loans 3,443, , ,348, , Bond Anticipation Notes 166, $ 101, , , , Net Debt Issued 3,790, , , ,707, , Authorized But Not Issued: General Capital Fund: Bonds and Notes 23, , Utility Capital Fund: Bonds and Notes 1,052, ,051, Authorized But Not Issued: 1,075, ,051, , Total Debt Issued and Authorized But Not Issued $ 4,866, $ 101, $ 1,236, $ 3,731, $ 252, Permanently funded debt as of December 31, 2016, consisted of the following: $225, Farmers Home Administration Loan Payable dated August 9, 1995, payable in annual installments through August 9, Interest is paid annually at a rate of 5% per annum. The balance remaining at December 31, 2016, was $77, $2,685, USDA Loan Payable dated December 20, 2012, payable in semi-annual installments through December 20, Interest is paid semi-annually at a rate of 2.75% per annum. The balance remaining at December 31, 2016, was $2,528, $231, NJ Environmental Infrastructure Trust Loan Payable dated June 6, 2013, payable in semi-annual installments through August 1, Interest is paid semi-annually at rates of.57% to 3.41% per annum. The balance remaining at December 31, 2016, was $199, $667, NJ Environmental Infrastructure Trust Fund Loan Payable dated June 6, 2013, payable in semi-annual installments through August 1, There is no interest charged on this loan. The balance remaining at December 31, 2016, was $543,

41 BOROUGH OF NATIONAL PARK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 AND 2015 NOTE 11: LONG-TERM DEBT (CONTINUED) Schedule of Annual Debt Service for Principal and Interest for Bonded Debt Issued and Outstanding Year Ended December 31 Interest Principal Total Utility Loans: 2017 $ 78, $ 96, $ 174, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , $ 1,540, $ 3,348, $ 4,888, Summary of Statutory Debt Condition Annual Debt Statement The summarized statement of debt condition which follows is prepared in accordance with the required method of setting up the Annual Debt Statement and indicates a statutory net debt of.094%. Gross Debt Deductions Net Debt School District Debt $ 2,890, $ 2,890, Utility Debt 3,585, ,585, General Debt 145, $ 145, $ 6,622, $ 6,476, $ 145, Net Debt $145,622.00/Equalized Valuation Basis per NJSA 40A:2-2 as amended $154,434, =.094%. Borrowing Power Under NJSA 40:A2-6 as Amended 3 1/2% of Equalized Valuation Basis (Municipal) $ 5,405, Net Debt 145, Remaining Borrowing Power $ 5,259, Calculation of Self-Liquidating Purpose Water & Sewer Utility per NJSA 40:2-45 Cash Receipts from Fees, Rents or Other Charges $ 1,015, Deductions: Operating and Maintenance Costs $ 736, Debt Service 206, , Excess in Revenue $ 72,

42 NOTE 12: NOTES PAYABLE BOROUGH OF NATIONAL PARK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 AND 2015 The Borough has outstanding at December 31, 2016, a General Capital bond anticipation note in the amount of $121,872.00, payable to Fulton Bank of New Jersey. This note will mature on December 11, 2017, at an interest rate of 1.5%. This note was used for preliminary costs associated with the Hawthorne Landfill redevelopment project. The Borough also had a Utility Capital bond anticipation notes in the amount of $237, payable to Fulton Bank of New Jersey that will mature on June 19, 2017, at the interest rate of 1.5%. The Utility Capital notes were used for various capital improvements and fire hydrant replacement. NOTE 13: LEASE OBLIGATIONS The Borough had lease agreements in effect at December 31, 2016, for the purchase of a fire truck and three pickup trucks. Future minimum lease payments under capital leases agreements are as follows: Year Ended December 31, Principal Interest Total 2017 $ 72, $ 15, $ 87, , , , , , , , , , , , , , , , $ 489, $ 68, $ 557, NOTE 14: PENSION FUNDS Description of Plans - All eligible employees of the Borough are covered by the Public Employees' Retirement System, (PERS), a cost-sharing, multiple-employer defined benefit pension plan which has been established by state statute and is administered by the New Jersey Division of Pension and Benefits (Division). According to the State of New Jersey Administrative Code, all obligations of the System will be assumed by the State of New Jersey should the Systems terminate. The Division issues a publicly available financial report that includes the financial statements and required supplementary information for the Public Employees Retirement System. The reports may be obtained by writing to the Division of Pensions and Benefits, P.O. Box 295, Trenton, New Jersey or can be accessed on the internet at: Public Employees' Retirement System (PERS) - The Public Employees' Retirement System (PERS) was established as of January 1, 1955, under the provisions of NJSA 43:15A to provide retirement, death, disability, and medical benefits to certain qualified members. The Public Employees Retirement System is a cost-sharing, multiple-employer plan. Membership is generally required for substantially all full-time employees of the State or any county, municipality, school district or public agency; provided the employee is not a member of another state-administered retirement system or other state or local jurisdiction. 38

43 NOTE 14: PENSION FUNDS (CONTINUED) BOROUGH OF NATIONAL PARK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 AND 2015 Funding Policy - The contribution policy is set by NJSA 43:15A, Chapter 62, P.L. of 1994, Chapter 115, P.L. of 1997, and NJSA 18:66 and requires contributions by active members and contributing employers. Plan member and employer contributions may be amended by State of New Jersey legislation. PERS provide for employee contributions of 7.06% to 7.2% of employees annual compensation, as defined. Subsequent increases will be phased in over 7 years (each July 1) to bring the total pension contribution rate to 7.5% as of July 1, Employers are required to contribute at an actuarially determined rate in PERS. The PERS employer rates in effect for 2016 is 12.46%, of covered payroll, as reported on June 30, The actuarially determined contribution includes funding for, cost-of-living adjustments, noncontributory death benefits, and post-retirement medical premiums. The Borough s contributions to PERS for the years ending December 31, 2016, 2015, and 2014, were $49,448.00, $43,352.99, and $47,164.00, respectively, equal to the required contributions for each year. The Borough also contributed to PFRS for the years ending December 31, 2016, 2015, and Those contributions were $4,318.00, $4,305.00, and $4,221.00, respectively, equal to the required contributions for each year. The Borough disbanded its Police force in the year Significant Legislation - Chapter 78, P.L. 2011, effective June 28, 2011, made various changes to the manner in which the Public Employees Retirement System (PERS) operates and to the benefit provisions of that system. Chapter 78 s provisions impacting employee pension and health benefits include: New members of the PERS hired on or after June 28, 2011, (Tier 5 members) will need 30 years of creditable service and age 65 for receipt of the early retirement benefit without a reduction of ¼ of 1% for each month that the member is under age 65. The eligibility age to qualify for a service retirement in the PERS is increased from age 63 to 65 for Tier 5 members. The payment of automatic cost-of-living adjustment (COLA) additional increases to current and future retirees and beneficiaries is suspended until reactivated as permitted by this law. New employee contribution requirements towards the cost of employer-provided health benefit coverage. Employees are required to contribute a certain percentage of the cost of coverage. The rate of contribution is determined based on the employee s annual salary and the selected level of coverage. The increased employee contributions will be phased in over a 4-year period for those employed prior to Chapter 78 s effective date with a minimum contribution required to be at least 1.5% of salary. In addition, this new legislation changes the method for amortizing the pension systems unfunded accrued liability (from a level percent of pay method to a level dollar of pay). Chapter 1, P.L. 2010, effective May 21, 2010, made a number of changes to the Stateadministered retirement systems concerning eligibility, the retirement allowance formula, the definition of compensation, the positions eligible for service credit, the non-forfeitable right to a pension, the prosecutor s part of the PERS, and employer contributions to the retirement systems. 39

44 NOTE 14: PENSION FUNDS (CONTINUED) BOROUGH OF NATIONAL PARK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 AND 2015 Significant Legislation (Continued) - Also, Chapter 1, P.L changed the membership eligibility criteria for new members of PERS from the amount of annual compensation to the number of hours worked weekly. Also, it returned the benefit multiplier for new members of PERS to 1/60th from 1/55th, and it provided that new members of PERS have the retirement allowance calculated using the average annual compensation for the last five years of service instead of the last three years of service. New members of PERS will no longer receive pension service credit from more than one employer. Pension service credit will be earned for the highest paid position only. For new members of the PFRS, the law capped the maximum compensation that can be used to calculate a pension from these plans at the annual wage contribution base for social security, and requires the pension to be calculated using a three year average annual compensation instead of the last year s salary. This law also closed the Prosecutors Part of the PERS to new members and repealed the law for new members that provided a non-forfeitable right to receive a pension based on the laws of the retirement system in place at the time 5 years of pension service credit is attained. The law also requires the State to make its full pension contribution, defined a 1/7th of the required amount, beginning in fiscal years Chapter 3, P.L. 2010, effective May 21, 2010, replaced the accidental and ordinary disability retirement for new members of the PERS with disability insurance coverage similar to that provided by the State to individuals enrolled in the State s Defined Contribution Retirement Program (DCRP). Chapter 92, P.L implemented certain recommendations contained in the December 1, 2006, report of the Joint Legislative Committee on Public Employee Benefits Reform; established a DCRP for elected and certain appointed officials, effective July 1, 2007; the new pension loan interest rate became 4.69% per year, and an $8.00 processing fee per loan was charged, effective January 1, The legislation also removed language from existing law that permits the State Treasurer to reduce employer pension contributions needed to fund the Funds and Systems when excess assets are available. NOTE 15: FINANCIAL INFORMATION RELATED TO GASB 68 & GASB 71 FOR PUBLIC RETIREMENT SYSTEMS New Jersey municipalities do not follow GAAP accounting principles and, as such, do not follow GASB requirements with respect to recording the net pension liability as a liability on their balance sheets. However, NJAC 5:30-6.1(c)(2) requires municipalities and counties to disclose GASB 68 & GASB 71 information in the Notes to the Financial Statements. The following disclosures meet the requirements of GASB 68 & GASB 71 for the PERS retirement system. Public Employee s Retirement System - At December 31, 2016, the Borough s proportionate share of net pension liability was $1,721,949. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The Borough s proportion of the net pension liability was based on a projection of the Borough s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. At June 30, 2016 and 2015, the Borough s allocation percentage was % and % respectively. 40

45 BOROUGH OF NATIONAL PARK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 AND 2015 NOTE 15: FINANCIAL INFORMATION RELATED TO GASB 68 & GASB 71 FOR PUBLIC RETIREMENT SYSTEMS (CONTINUED) For the year ended December 31, 2016, the Borough s pension expense would have been $180,670 if New Jersey municipalities followed GAAP accounting principles. The Borough s deferred outflows of resources and deferred inflows of resources (which are not recorded) related to PERS are from the following sources: Deferred Outflows of Resources Changes of Assumptions $ 324,373 Net Difference Between Projected and Actual Earnings on Pension Plan Investments 83,863 Changes in Proportion and Differences Between the Borough's Contributions and Proportionate Share of Contributions 62,498 Difference Between Expected and Actual Experience 25,812 Deferred Inflows of Resources $ 496,546 None Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions are not recognized in pension expense since New Jersey municipalities do not follow GAAP accounting principles. If GAAP accounting principles were followed, the other amounts reported as deferred outflows of resources and deferred inflows of resources would have been recognized in pension expense as follows: Year Ended December 31, Amount 2017 $ 110, , , , $ 36, ,546 Additional information Collective balances at June 30, 2016 and 2015, are as follows: June 30, 2016 June 30, 2015 Collective Deferred Outflows of Resources $ 7,815,204,785 $ 2,946,265,815 Collective Deferred Inflows of Resources 360,920,604 Collective Net Pension Liability 29,617,131,759 22,447,996,119 Borough's Proportion % % 41

46 BOROUGH OF NATIONAL PARK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 AND 2015 NOTE 15: FINANCIAL INFORMATION RELATED TO GASB 68 & GASB 71 FOR PUBLIC RETIREMENT SYSTEMS (CONTINUED) Contributions - The contribution policy for PERS is set by NJSA 15A and requires contributions by active members and contributing employers. The Borough s contribution amount was based on an actuarially determined rate which includes the normal cost and unfunded accrued liability. Actuarial Assumptions The total pension liability for the June 30, 2016, measurement date was determined by an actuarial valuation as of July 1, 2015, which was rolled forward to June 30, This actuarial valuation used the following actuarial assumptions, applied to all periods in the measurement: Inflation Rate 3.08% Salary Increases: Through % Based on Age Thereafter % Based on Age Investment Rate of Return 7.65% Pre-retirement mortality rates were based on the RP-2000 Employee Pre-retirement Mortality Tables for male and female active participants. For local employees, mortality tables are set back 2 years for males and 7 years for females. In addition, the table provides for future improvements in mortality from the vase year of 2013 using a generational approach based on the plan actuary s modified MP-2014 projection scale. Post-retirement mortality rates were based on the RP-2000 Combined Healthy Male and Female Mortality Tables (set back 1 year for males and females) for service retirements and beneficiaries of former members and a oneyear static projection based on mortality improvement Scale AA. In addition, the tables for service retirements and beneficiaries of former members provide for future improvements in mortality from the base year of 2013 using a generational approach based on the plan actuary s modified MP-2014 projection scale. Disability retirement rates used to value disabled retirees were based on the RP-2000 Disabled Mortality Table (set back 3 years for males and set forward 1 year for females). The actuarial assumptions used in the July 1, 2015, valuation were based on the results of an actuarial experience study for the period July 1, 2011 to June 30, Detailed information about the pension plan s fiduciary net position is available in the separately issued State of New Jersey Division of Pension and Benefits financial report at: gov/treasury/pensions/employer-home.shtml. NOTE 16: SCHOOL TAXES Regulations provide for the deferral of not more than 50% of the annual levy when school taxes are raised for a school year and have not been requisitioned by the school district. In the Borough of National Park s case, the amount of $1,983, would be the maximum amount permitted to be deferred as of December 31, 2016, under these regulations. The Borough has elected to defer school taxes and the accumulation of such deferrals amounts to $1,910, Local School District Tax and Regional High School Tax has been raised and liabilities deferred by statute, resulting in the school taxes payable set forth in the Current Fund liabilities as follows: 42

47 NOTE 16: SCHOOL TAXES (CONTINUED) BOROUGH OF NATIONAL PARK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 AND 2015 Local School District Tax Regional High School Tax Balance Balance Balance Balance Dec. 31, 2016 Dec. 31, 2015 Dec. 31, 2016 Dec. 31, 2015 Balance of Tax $ 1,063, $ 1,044, $ 920, $ 906, Deferred 1,005, ,005, , , Tax Payable $ 58, $ 39, $ 15, $ NOTE 17: ECONOMIC DEPENDENCY The Borough of National Park is not economically dependent on any one business or industry within the Borough. NOTE 18: TAXES COLLECTED IN ADVANCE Taxes collected in advance are recorded as cash liabilities in the financial statements. The following is a comparison of the liability for the current and previous year: Balance Balance Dec. 31, 2016 Dec. 31, 2015 Prepaid Taxes - Cash Liability $ 43, $ 41, NOTE 19: RISK MANAGEMENT The Borough is exposed to various risks or loss related to torts, thefts of, damage to, and destruction of assets, errors and omissions, injuries to employees, and natural disasters. The Borough maintains commercial insurance coverage for property, liability, and surety bonds. There have been no claims in excess of coverage and no reduction in coverage during the year New Jersey Unemployment Compensation Insurance The Borough has elected to fund its New Jersey Unemployment Compensation Insurance under the Benefit Reimbursement Method. Under this plan, the Borough is required to reimburse the New Jersey Unemployment Trust Fund for benefits paid to its former employees and charged to its account with the State. The Borough is billed quarterly for amounts due to the State. The following is a summary of the Borough s contributions, employee contributions, reimbursements to the State for benefits paid, and the ending balance of the Borough s Trust Fund for the current and previous two years: Borough Employee Amount Ending Year Contribution Contribution Reimbursed Balance 2016 None None None $ 3, None None None 3, None None $ ,

48 NOTE 20: LABOR CONTRACTS BOROUGH OF NATIONAL PARK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 AND 2015 As of December 31, 2016, there are no collective bargaining units in the Borough of National Park. NOTE 21: COMMITMENTS AND CONTINGENCIES The Borough participates in federal and state assistance grant programs. The Borough is potentially liable for expenditures which may be disallowed pursuant to the terms of the grant programs. Management is not aware of any material items of noncompliance which would result in the disallowance of program expenditures. It is the Borough of National Park Counsel s opinion that there exists no litigation or contingent liability that may be pending against the Borough of National Park that would have an adverse effect on the financial position in the future. NOTE 22: SUBSEQUENT EVENTS Management has reviewed and evaluated all events and transaction that occurred between December 31, 2016 and May 19, 2017, the date that the financial statements were issued, and no additional items have come to their attention that would require disclosure. 44

49 SCHEDULES RELATED TO ACCOUNTING AND REPORTING FOR PENSIONS (GASB 68 & GASB 71) 45

50 EXHIBIT F-1 SCHEDULE OF THE BOROUGH'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY - PERS Last Three Fiscal Years Year Ended 12/31/16 12/31/15 12/31/14 Borough's Proportion of the Net Pension Liability (Asset) % % % Borough's Proportionate Share of the Net Pension Liability (Asset) $ 1,721,949 $ 1,228,889 $ 890,322 Borough's Covered-Employee Payroll 395, , ,365 Borough's Proportionate Share of the Net Pension Liability (Asset) as a Percentage of its Covered-Employee Payroll % % % Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 40.13% 47.92% 52.08% Measurement Date 6/30/2016 6/30/2015 6/30/

51 EXHIBIT F-2 SCHEDULE OF BOROUGH CONTRIBUTIONS - PERS Last Three Fiscal Years Year Ended 12/31/16 12/31/15 12/31/14 Contractually Required Contribution $ 51,651 $ 47,065 $ 39,202 Contributions in Relation to the Contractually Required Contribution 51,651 47,065 39,202 Contribution Deficiency (Excess) None None None Borough's Covered-Employee Payroll $ 395,018 $ 383,214 $ 374,365 Contributions as a Percentage of Covered-Employee Payroll 13.08% 12.28% 10.47% Measurement Date 6/30/2016 6/30/2015 6/30/

52 SUPPLEMENTARY DATA 48

53 PETRONI & ASSOCIATES LLC Certified Public Accountants Registered Municipal Accountants MEMBER: AMERICAN INSTITUTE OF 102 West High Street, Suite 100 P.O. Box 279 Glassboro, NJ CERTIFIED PUBLIC ACCOUNTANTS (856) Fax (856) Nick L. Petroni, CPA, RMA Mary A. Carey, RMA Wendy G. Fama, CPA Denise R. Nevico, CPA Jeffrey T. Ridgway, CPA Deanna L. Roller, CPA, RMA REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Mayor and Members of the Borough Council Borough of National Park 7 South Grove Avenue National Park, New Jersey Independent Auditor s Report We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States and the audit requirements as prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey, the accompanying balance sheets - regulatory basis of the various funds and account group, the related statement of operations and changes in fund balance - regulatory basis, and the related statement of revenues - regulatory basis and statement of expenditures - regulatory basis of the Borough of National Park, as of and for the year ended December 31, 2016, and the related notes to the financial statements, which collectively comprise the Borough of National Park s basic financial statements, and have issued our report thereon dated May 19, 2017, which contained an adverse opinion on those financial statements due to being presented in accordance with the New Jersey regulatory basis of accounting. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Borough of National Park s control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements but not for the purpose of expressing an opinion on the effectiveness of the Borough of National Park s internal control. Accordingly, we do not express an opinion on the effectiveness of the Borough s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. 49

54

55 CURRENT FUND 51

56 EXHIBIT A-4 SCHEDULE OF CURRENT FUND CASH - CHIEF FINANCIAL OFFICER Current Ref. Fund Payroll Balance December 31, 2015 A $ 1,633, $ 7, Increased by Receipts: Tax Collector A-5 $ 6,175, Grants Receivable A-6 301, Reserve for Grants - Unappropriated A-17 7, Due State of New Jersey - Senior Citizen and Veterans Deductions A-7 42, Homestead Rebate A-8 134, Revenue Accounts Receivable A , Due Animal Control Trust Fund B-1 5, Due Tax Sale Premium Trust B Due General Capital Fund C Due Utility Operating Fund 101, Due State of New Jersey: Construction DCA Fees 2, Marriage Licenses Payroll Withholding 172, Employer Share of Taxes and Refunds 1, , Net Payroll 379, ,368, , ,001, , Decreased by Disbursements: Budget Appropriations A-3 2,009, Appropriation Reserves A-12 32, Encumbrances Payable A-13 18, Local District School Tax A-14 2,107, Regional High School Tax A-15 1,826, Reserve for Grants - Appropriated A , Tax Overpayments Refunded 4, Payroll Taxes 273, Net Payroll 379, Due Utility Operating Fund 112, County Taxes A-8 949, County Library Taxes A-8 72, County Open Space Taxes A-8 61, Due County for Added Taxes 2, Due from Animal Control Trust Fund Due from General Capital Fund Due from Tax Sale Premium Due State of New Jersey: Construction DCA Fees 2, Marriage Licenses Reserve for Insurance Proceeds ,311, , Balance December 31, 2016 A $ 1,690, $ 4,

57 EXHIBIT A-5 SCHEDULE OF CURRENT FUND CASH - COLLECTOR Ref. Balance December 31, 2015 A $ 28, Increased by Receipts: Taxes Receivable A-8 $ 6,186, Tax Title Liens Receivable A-9 33, Water Liens Receivable D Sewer Liens Receivable D-9 1, Revenue Accounts Receivable A-11 64, Prepaid Taxes A 43, Tax Overpayments 21, Tax Sale Premiums 13, Due Tax Sale Premium Trust 76, Due Water Operating Fund 6, Due Sewer Operating Fund 5, Due Outside Lien Holder 188, Decreased by Disbursements: Paid to Treasurer A-4 6,175, Due Outside Lien Holder 188, Tax Sale Premiums Returned 76, Due Tax Sale Premium Trust 13, Due Water Operating Fund 6, Due Sewer Operating Fund 5, ,641, ,670, ,466, Balance December 31, 2016 A $ 203,

58 EXHIBIT A-6 SCHEDULE OF GRANTS RECEIVABLE Balance Revenue Balance Grant Dec. 31, 2015 Realized Received Canceled Dec. 31, 2016 Federal: Community Development Block Grant ADA Curb Cuts - St. John's Walk $ 6, $ 6, ADA Curb Cuts - Various Road Ways 9, , New Jersey Transportation Trust Fifth Street 38, $ 38, Wesley Avenue 50, , Jefferson Avenue 8, , Simpson Avenue 43, , Reconstruction of Various Roadways 45, , Second and Princeton Avenues 170, , $ 42, Military Drive, Second Street & Wesley $ 193, , State: Municipal Alliance on Drug & Alcohol Abuse , , , Hazardous Discharge Site Remediation 75, , , Recycling Tonnage 3, , $ 447, $ 205, $ 301, $ 115, $ 236, Ref. A A-2 A-4 A-1 A 54

59 EXHIBIT A-7 SCHEDULE OF DUE TO STATE OF NEW JERSEY - SENIOR CITIZEN AND VETERANS DEDUCTIONS Ref. Balance December 31, 2015 A $ Increased by: Receipts A-4 42, Decreased by: Deductions Per Tax Duplicate $ 43, Deductions Allowed by Collector 1, Deductions Disallowed by Collector (922.81) 43, A-8 43, Balance December 31, 2016 A $

60 EXHIBIT A-8 SCHEDULE OF TAXES RECEIVABLE AND ANALYSIS OF PROPERTY TAX LEVY Transferred Balance Collected Overpayments to Tax Title 6% Penalty Balance Year Dec. 31, 2015 Levy Applied Canceled Liens Levied Dec. 31, $ $ , $ 4, , $ , , , $ 1, $ 1, , , , , , , , , , , , , , $ 6,464, $ 40, ,073, , , , $ , $ 324, $ 6,464, $ 40, $ 6,364, $ 6, $ 32, $ 45, $ $ 301, Ref. A A-9 A Ref. Cash A-5 $ 6,186, Homestead Rebate A-4 134, Due State of New Jersey A-7 43, $ 6,364,

61 EXHIBIT A-8 (Continued) SCHEDULE OF TAXES RECEIVABLE AND ANALYSIS OF PROPERTY TAX LEVY Analysis of Property Tax Levy Tax Yield General Purpose Tax: Business Personalty Tax $ 14, General Property Tax 6,441, $ 6,455, Added Taxes (54: et seq.) 8, $ 6,464, Tax Levied Ref. Regional High School Tax (Abstract) A-15 $ 1,841, Local District School Tax (Abstract) A-14 2,126, County Taxes: County Tax (Abstract) $ 949, County Library Tax (Abstract) 72, County Open Space Tax (Abstract) 61, Due County for Added Taxes (54: et seq.) 1, Total County Taxes 1,085, Local Tax for Municipal Purposes A-2 1,403, Add: Additional Taxes Levied 7, ,410, $ 6,464,

62 EXHIBIT A-9 SCHEDULE OF TAX TITLE LIENS RECEIVABLE Ref. Balance December 31, 2015 A $ 161, Increased by: Transfers from Taxes Receivable A-8 $ 45, Interest and Costs on Tax Sale 2, , , Decreased by: Collections A-5 33, Balance December 31, 2016 A $ 175, SCHEDULE OF PROPERTY ACQUIRED FOR TAXES (AT ASSESSED VALUATION) EXHIBIT A-10 Ref. Balance December 31, 2015 A $ 16, Balance December 31, 2016 A $ 16,

63 EXHIBIT A-11 SCHEDULE OF REVENUE ACCOUNTS RECEIVABLE Balance Collected Balance Dec. 31, 2015 Accrued CFO Tax Collector Dec. 31, 2016 Miscellaneous Revenue Anticipated Licenses: Alcoholic Beverages $ 4, $ 4, Fees and Permits $ 3, , , $ $ 3, Interest and Costs on Taxes 59, , Rents - Radio Tower 30, , Energy Receipts Tax 436, , Uniform Construction Code 15, , , , Uniform Fire Safety Act 1, , Cable TV Franchise 40, , Miscellaneous Revenue Not Anticipated Administrative Fee Interest on Investments 4, , Prior Year Voided Checks Miscellaneous 25, , , $ 19, $ 660, $ 595, $ 64, $ 19, Ref. A A-4 A-5 A 59

64 EXHIBIT A-12 SCHEDULE OF APPROPRIATION RESERVES Balance Paid or Balance Dec. 31, 2015 Charged Lapsed Other Expenses: Municipal Clerk $ 3, $ $ 2, Financial Administration Collection of Taxes 2, , Engineering 1, Land Use 2, , Aid to Volunteer Fire 2, , Road Repair and Maintenance 5, , , Vehicle Maintenance 2, , Public Buildings and Grounds 1, Telephone Gasoline 10, , Tipping Fees 46, , , Other Accounts - No Change 83, , $ 162, $ 32, $ 129, Ref. A A-4 A-1 60

65 EXHIBIT A-13 SCHEDULE OF ENCUMBRANCES PAYABLE Current Ref. Fund Balance December 31, 2015 $ 18, Decreased by: Payments A-4 18,

66 EXHIBIT A-14 SCHEDULE OF LOCAL DISTRICT SCHOOL TAX PAYABLE Ref. Balance December 31, 2015: School Tax Payable A $ 39, School Tax Deferred 1,005, $ 1,044, Increased by: Levy - School Year July 1, 2016 to June 30, 2017 A-8 2,126, ,171, Decreased by: Payments A-4 2,107, Balance December 31, 2016: School Tax Payable A 58, School Tax Deferred 1,005, $ 1,063, Tax Liability for Local District School Tax: Tax Paid A-14 $ 2,107, Tax Payable December 31, 2016 A-14 58, ,166, Less: Tax Payable December 31, 2015 A-14 39, Amount Charged to Operations A-1 $ 2,126,

67 EXHIBIT A-15 SCHEDULE OF REGIONAL HIGH SCHOOL TAX PAYABLE Ref. Balance December 31, 2015: School Tax Payable A $ School Tax Deferred 905, $ 906, Increased by: Levy - School Year July 1, 2016 to June 30, 2017 A-8 1,841, ,747, Decreased by: Payments A-4 1,826, Balance December 31, 2016: School Tax Payable A 15, School Tax Deferred 905, $ 920, Tax Liability for Regional High School Tax: Tax Paid A-15 $ 1,826, Tax Payable December 31, 2016 A-15 15, ,841, Less: Tax Payable December 31, 2015 A Amount Charged to Operations A-1 $ 1,841,

68 EXHIBIT A-16 SCHEDULE OF RESERVE FOR GRANTS - APPROPRIATED Federal Grants: Community Development Block Grant ADA Curb Cuts - St. John's Walk 6, Transferred from Balance Budget Paid or Balance Dec. 31, 2015 Appropriation Charged Canceled Dec. 31, 2016 $ $ 1, $ 5, ADA Curb Cuts - Various Road Ways 9, , New Jersey Transportation Trust Wesley Avenue 6, , Military Drive, Second Street & Wesley $ 193, $ 193, Reconstruction of Various Roadways 18, , , Second and Princeton Avenues 170, , State Grants: Hazardous Discharge Site Remediation 110, , , Clean Communities 13, , , Recycling Tonnage Grant 33, , , Municipal Alliance 1, , , , New Jersey Tree Planting 2000 Grant Local All Hazardous Emergency Operations 2, , Stormwater Grant 1, , $ 375, $ 208, $ 110, $ 68, $ 405, Ref. A A-3 A-4 A-1 A 64

69 EXHIBIT A-17 SCHEDULE OF RESERVE FOR GRANTS - UNAPPROPRIATED Balance Received Dec. 31, 2016 State Grants: Clean Communities $ 7, $ 7, Ref. A-5 A 65

70 TRUST FUND 66

71 EXHIBIT B-1 SCHEDULE OF TRUST FUND CASH - CHIEF FINANCIAL OFFICER Animal Unemployment Playground Control Compensation Donations Landfill Ref. Trust Fund Trust Escrow Balance December 31, 2015 B $ 13, $ 3, $ 6, $ 0.37 Increased by Receipts: Dog License Fees: Municipal Share B-3 3, State Share Interest Earned , , , , Decreased by Disbursements: Paid to State of New Jersey Expenditures Under RS 4: B Due Current Fund A-4 5, , Balance December 31, 2016 B $ 11, $ 3, $ 6, $

72 EXHIBIT B-2 SCHEDULE OF TRUST FUND CASH - COLLECTOR Ref. Balance December 31, 2015 B $ 129, Increased by: Premiums Received at Tax Sale B-4 $ 13, Interest Due Current Fund , , Decreased by: Premiums Returned B-4 76, Due Current Fund A , Balance December 31, 2016 B $ 66, SCHEDULE OF RESERVE FOR DOG FUND EXPENDITURES EXHIBIT B-3 Ref. Balance December 31, 2015 B $ 8, Increased by: Municipal Share of Dog License Fees B-1 3, , Decreased by: Expenditures Under R.S.4: : Cash B-1 $ Statutory Excess to Current Fund 3, , Balance December 31, 2016 B $ 8, License Fees Collected Year Amount 2014 $ 4, $ 4, ,

73 EXHIBIT B-4 SCHEDULE OF RESERVE FOR TAX SALE PREMIUMS Ref. Balance December 31, 2015 B $ 129, Increased by: Premiums Received at Tax Sale B-2 13, , Decreased by: Premiums Returned B-2 76, Balance December 31, 2016 B $ 66,

74 GENERAL CAPITAL FUND 70

75 EXHIBIT C-2 SCHEDULE OF GENERAL CAPITAL FUND CASH - CHIEF FINANCIAL OFFICER Ref. Balance December 31, 2015 C $ 14, Increased by: Interest Earned C , Decreased by: Due Current Fund C-3:A Balance December 31, 2016 C $ 14,

76 EXHIBIT C ANALYSIS OF GENERAL CAPITAL FUND CASH Balance Receipts Disbursements Transfers Balance Dec. 31, 2015 Miscellaneous Miscellaneous From To Dec. 31, 2016 Fund Balance $ $ 1, $ 1, Capital Improvement Fund 31, $ 25, , Due Current Fund $ $ Due Utility Capital Fund (20,000.00) (20,000.00) Reserve for Improvement to Roads 10, , Reserve for River Front Development Improvement Authorizations: Ordinance # Purchase of Fire Truck Repair of Roads 4, , Repair of Roads 5, , Purchase of a Wood Chipper 1, , Purchase of Computer Equipment 1, , Acquisition of Computer Equipment and Telecommunications Equipment (19,278.73) (19,278.73) General Municipal Building Improvements 25, , $ 14, $ $ $ 26, $ 26, $ 14, Ref. C C-2 C-2 C 72

77 EXHIBIT C-4 SCHEDULE OF DEFERRED CHARGES TO FUTURE TAXATION - UNFUNDED Ordinance # Analysis of Balance December 31, 2016 Notes Paid Financed By Unexpended Balance by Budget Balance Bond Anticipation Improvement Purpose Dec. 31, 2015 Appropriation Dec. 31, 2016 Notes Expenditures Authorization Purchase of Ambulance $ 1, $ 1, Preliminary Costs Associated with the Hawthorne Landfill Redevelopment Project 166, , $ 121, $ 121, Acquisition of Fire Command Vehicle 13, , Acquisition of Computer Equipment and Telecommunications Equipment 23, , $ 19, $ 4, $ 205, $ 59, $ 145, $ 121, $ 19, $ 4, Ref. C C-7 C C-7 C-3 73

78 EXHIBIT C-5 SCHEDULE OF CAPITAL IMPROVEMENT FUND Balance December 31, 2015 C $ 31, Decreased by: Appropriated to Finance Improvement Authorizations C-6 25, Balance December 31, 2016 C $ 6, Ref. 74

79 EXHIBIT C-6 SCHEDULE OF IMPROVEMENT AUTHORIZATIONS Balance Balance Ordinance Dec. 31, 2015 Authorization December 31, 2016 Number Improvement Description Date Amount Unfunded Authorization Cancelled Funded Unfunded 95-1 Purchase of Fire Truck 11/29/95 $ 175, $ $ Repair of Roads 08/25/99 350, , $ 4, Repair of Roads 08/15/01 200, , , Purchase of Wood Chipper 03/05/03 20, , , Purchase of Computer Equipment 10/05/05 16, , , Acquisition of Computer Equipment and Telecommunications Equipment 05/09/12 25, , $ 4, General Municipal Building Improvements 10/09/16 25, $ 25, $ 25, $ 16, $ 25, $ 1, $ 36, $ 4, Ref. C C-5 C-3 C C 75

80 EXHIBIT C-7 SCHEDULE OF BOND ANTICIPATION NOTES Date of Issue of Original Date of Date of Interest Balance Balance Ordinance # Purpose Note Issue Maturity Rate Dec. 31, 2015 Decreased Dec. 31, Purchase of Ambulance 11/17/09 6/15/15 6/14/ % $ 1, $ 1, Preliminary Costs Associated with the Hawthorne Landfill Redevelopment Project 5/25/10 12/12/16 12/11/ % 166, , $ 121, Acquisition of Fire Command Vehicle 7/8/10 6/15/15 6/14/ % 13, , $ 181, $ 59, $ 121, Ref. C C 76

81 EXHIBIT C-8 SCHEDULE OF BONDS AUTHORIZED BUT NOT ISSUED Balance Balance Ordinance # Improvement Description Dec. 31, 2015 Dec. 31, Acquisition of Computer Equipment and Telecommunications Equipment $ 23, $ 23,

82 EXHIBIT C-9 SCHEDULE OF OBLIGATIONS UNDER CAPITAL LEASES Date of Term of Amount of Original Issue Interest Balance Balance Purpose Lease Lease Principal Interest Rate Dec. 31, 2015 Decreased Dec. 31, 2016 Fire Truck 1/4/14 10 Years $ 491, $ 96, % $ 449, $ 43, $ 406, Pick-up Trucks 7/31/15 5 Years 138, , % 109, , , $ 559, $ 70, $ 489, Ref. C C 78

83 WATER AND SEWER UTILITY FUND 79

84 EXHIBIT D-5 SCHEDULE OF WATER AND SEWER UTILITY FUND CASH - CHIEF FINANCIAL OFFICER Ref. Operating Capital Balance December 31, 2015 D $ 646, $ (6,206.07) Increased by: Water Utility Collector D-6 $ 437, Sewer Utility Collector D-6 474, Miscellaneous Revenue D-3 1, Bond Anticipation Note Payable D , Grant Receivable D , Due Current Fund 11, Due Utility Capital Fund D-5 88, ,013, , ,659, , Decreased by: Budget Appropriations D-4 756, Appropriation Reserves D-12 37, Encumbrance Payable D-13 29, Accounts Payable D-14 52, Accrued Interest Paid D-17 79, Due Utility Operating Fund D-5 88, Improvement Authorization D , , , Balance December 31, 2016 D $ 704, $ 34,

85 EXHIBIT D-6 SCHEDULE OF WATER AND SEWER UTILITY FUND CASH - COLLECTOR Ref. Water Sewer Balance December 31, 2015 D $ 2.81 $ Increased by: Consumer Accounts Receivable D-8 $ 439, , Utility Rent Overpayments 2, , Miscellaneous D-3 9, , , , , , Decreased by: Paid to Treasurer D-5 437, , Balance December 31, 2016 D $ 13, $ 1,

86 EXHIBIT D-7 ANALYSIS OF WATER AND SEWER UTILITY CAPITAL CASH Receipts Bond Disbursements Balance Anticipation Improvement Transfers Balance Dec. 31, 2015 Notes Miscellaneous Authorizations Miscellaneous From To Dec. 31, 2016 Fund Balance $ 11, $ 11, Capital Improvement Fund $ Due Utility Operating Fund 88, $ $ 88, Due General Capital Fund 20, , Improvement Authorizations: Date Improvement Description 5/21/85 Improvements to Well 4, $ 4, /1/09 Repairs to Well #6 6, , /3/09 Various Capital Improvements (28,325.45) 205, $ 177, (82.00) 8/18/10 Fire Hydrant Replacement 3, , /11/12 Repair and/or Replacement of Pumping Stations (78,578.52) $ 78, (0.12) 10/10/12 Replacement of Pump Stations No. 1 & No. 2 (22,511.60) 22, $ (6,206.07) $ 101, $ 205, $ 177, $ 88, $ 11, $ 11, $ 34, Ref. D D-20 D-5 D-18 D-5 D 82

87 EXHIBIT D-8 SCHEDULE OF CONSUMER ACCOUNTS RECEIVABLE Ref. Total Water Sewer Balance December 31, 2015 D $ 187, $ 95, $ 91, Increased by: Utility Rents Levied 908, , , ,095, , , Decreased by: Collections D-6 903, , , Overpayments Applied 4, , , Transfer to Utility Liens D-9 2, , Canceled 7, , , , , , Balance December 31, 2016 D $ 176, $ 94, $ 82, SCHEDULE OF WATER AND SEWER UTILITY LIENS RECEIVABLE EXHIBIT D-9 Ref. Total Water Sewer Balance December 31, 2015 D $ 4, $ 1, $ 3, Increased by: Transfer from Consumer Accounts Receivable D-8 2, , Interest and Costs on Liens , , , Decreased by: Collections A-5 1, , Balance December 31, 2016 D $ 4, $ 1, $ 3,

88 EXHIBIT D-10 SCHEDULE OF FIXED CAPITAL Additions Balance By Bond Balance Dec. 31, 2015 Ordinance Dec. 31, 2016 Open Aeration System $ 97, $ 97, Utility Plant 177, $ 3,685, ,862, Other Tangible Utility Plant Water Division Rights Wells 344, , Pumping Station Equipment 9, ,000, ,010, Pumping Station Building 1, , Fire Hydrants 25, , Materials and Supplies 68, , Distribution Mains and Accessories 61, , Service Pipes and Stops 43, , Meters 93, , Engineering Tools and Equipment 8, , Storage Reservoirs and Stand Pipes 3, , Water Treatment Equipment 5, , Installation Service 1, , Maintenance and Repairs to Water Supply System 95, , , $ 1,038, $ 4,727, $ 5,766, Ref. D D-11 D 84

89 EXHIBIT D-11 SCHEDULE OF FIXED CAPITAL AUTHORIZED AND UNCOMPLETED Ordinance Ordinance Balance Transfer to Authorization Balance Number Improvement Description Date Amount Dec. 31, 2015 Fixed Capital Canceled Dec. 31, Repairs to Well #6 4/1/09 $ 49, $ 49, $ 42, $ 6, Various Capital Improvements 6/3/09 3,650, ,685, ,685, Fire Hydrant Replacement 8/18/10 150, , $ 150, Repair and/or Replacement of Pumping Stations 4/11/12 85, , , , Replacement of Pump Stations No. 1 & No. 2 10/10/12 1,660, ,660, , , $ 5,629, $ 4,727, $ 751, $ 150, Ref. D D-10 D-18 D 85

90 EXHIBIT D-12 SCHEDULE OF APPROPRIATION RESERVES Balance Paid or Balance Dec. 31, 2015 Charged Lapsed Operating: Other Expenses $ 54, $ 34, $ 19, Capital Outlay 2, , Other Accounts - No Change 30, , $ 87, $ 37, $ 50, Ref. D D-5 D-2 SCHEDULE OF ENCUMBRANCES PAYABLE EXHIBIT D-13 Operating Ref. Fund Balance December 31, 2015 D $ 29, Increased by: Charges to Budget D-4 $ , Decreased by: Payments D-5 29, Balance December 31, 2016 D $

91 EXHIBIT D-14 SCHEDULE OF ACCOUNTS PAYABLE Operating Ref. Fund Balance December 31, 2015 D $ 52, Decreased by: Payments D-5 52, SCHEDULE OF CAPITAL IMPROVEMENT FUND EXHIBIT D-15 Ref. Balance December 31, 2015 D $ Balance December 31, 2016 D $ SCHEDULE OF RESERVE FOR AMORTIZATION EXHIBIT D-16 Ref. Balance December 31, 2015 D $ 1,193, Increased by: Transfer from Deferred Reserve for Amortization D , Payment of Loan D-19 9, Grant Receipts D-5:D , ,122, Balance December 31, 2016 D $ 2,316,

92 EXHIBIT D-17 SCHEDULE OF ACCRUED INTEREST ON BONDS AND ANALYSIS OF BALANCE Ref. Balance December 31, 2015 D $ 6, Increased by: Budget Appropriation for: Interest on Bonds D-4 79, , Decreased by: Interest Paid D-5 79, Balance December 31, 2016 D $ 5, Analysis of Accrued Interest December 31, 2016 Principal Outstanding Dec. 31, 2016 Interest Rate From To Period Amount $ 77, % 8/9/16 12/31/ Days $ 1, ,528, % 12/20/16 12/31/16 11 Days 2, , Various 8/1/16 12/31/ Days 2, $ 3,348, $ 5,

93 EXHIBIT D-18 SCHEDULE OF IMPROVEMENT AUTHORIZATIONS Balance Ordinance Balance Dec. 31, 2015 Paid or Dec. 31, 2016 Improvement Description Date Amount Funded Unfunded Charged Canceled Unfunded Improvements to Wells 5/21/85 $ 15, $ 4, $ 4, Repair to Well #6 4/1/09 49, $ 6, , Various Capital Improvements 6/3/09 3,685, , $ 177, Fire hydrant Replacement 8/18/10 150, , $ 3, Repair and/or Replacement of Pumping Stations 4/11/12 85, , , Replacement of Pump Stations No. 1 & No. 2 10/10/12 1,660, , , $ 4, $ 933, $ 177, $ 756, $ 3, Ref. D D D-5 D Fund Balance D-1 $ 11, Bonds & Notes Authorized But Not Issued D , $ 756,

94 EXHIBIT D-19 SCHEDULE OF LOANS PAYABLE Date of Original Interest Balance Balance Purpose Issue Issue Rate Dec. 31, 2015 Decreased Dec. 31, 2016 Standby Well 08/06/85 $ 225, % $ 86, $ 9, $ 77, Various Capital Improvements 12/20/12 2,685, % 2,569, , ,528, Replacement of Pump Stations: Trust Portion 06/06/13 231, Various 210, , , Fund Portion 06/06/13 667, % 577, , , $ 3,443, $ 94, $ 3,348, Ref. D D Ref. Deferred Reserve for Amortization D-21 $ 85, Reserve for Amortization D-16 9, $ 94,

95 EXHIBIT D-20 SCHEDULE OF BOND ANTICIPATION NOTES Date of Issue Ordinance of Original Date of Date of Interest Balance Balance Number Purpose Note Issue Maturity Rate Dec. 31, 2015 Increased Decreased Dec. 31, Repairs to Well #6 11/17/09 6/15/15 06/14/ % $ 27, $ 27, Fire Hydrant Replacement 12/01/10 06/20/16 06/19/ % 138, , $ 136, Repair and/or Replacement of Pumping Stations 06/20/16 06/20/16 06/19/ % $ 78, , Replacement of Pump Stations No. 1 & No. 2 06/20/16 06/20/16 06/19/ % 22, , $ 166, $ 101, $ 30, $ 237, Ref. D D-5 D 91

96 EXHIBIT D-21 SCHEDULE OF DEFERRED RESERVE FOR AMORTIZATION Paid from Transfer to Ordinance Date of Balance Operating Budget Reserve for Authorization Balance Number Improvement Description Ordinance Dec. 31, 2015 Loans Notes Amortization Canceled Dec. 31, Repairs to Well #6 4/1/09 $ 21, $ 27, $ 42, $ 6, Various Capital Improvements 6/3/09 668, $ 40, , Fire Hydrant Replacement 8/18/10 11, , $ 14, Replacement of Pump Station 10/10/12 111, , , $ 812, $ 85, $ 30, $ 907, $ 6, $ 14, Ref. D D-19 D-20 D-16 D-18 D 92

97 EXHIBIT D-22 SCHEDULE OF BONDS & NOTES AUTHORIZED BUT NOT ISSUED Ordinance Balance Decreased Balance Number Improvement Description Dec. 31, 2015 Issued Grants Received Canceled Dec. 31, Various Capital Improvements $ 205, $ 205, $ Repair and/or Replacement of Pumping Stations 85, $ 78, $ 7, Replacement of Pump Stations No. 1 & No , , , $ 1,052, $ 101, $ 205, $ 745, $ Ref. D-5:D-20 D-5 D-18 93

98 PART II LETTER OF COMMENTS AND RECOMMENDATIONS YEAR ENDED DECEMBER 31,

99 GENERAL COMMENTS Contracts and Agreements Required to be Advertised for NJSA 40A:11-4 NJSA 40A:11-4 states Every contract or agreement awarded by the contracting agent for the provision or performance of any goods or services, the cost of which in the aggregate exceeds the bid threshold, shall be awarded only by resolution of the governing body of the contracting unit to the lowest responsible bidder after public advertising for bids and bidding therefore, except as is provided otherwise in this act or specifically by any other law. The governing body of the Municipality has the responsibility of determining whether the expenditures in any category will exceed the bid threshold within the fiscal year. Where question arises as to whether any contract or agreement might result in violation of the statute, the Solicitor s opinion should be sought before a commitment is made. The minutes indicate that resolutions were adopted and advertised authorizing the awarding of contracts or agreements for Professional Services per NJSA 40A:11.5. Inasmuch as the system of records did not provide for an accumulation of payments for categories for the performance of any work or the furnishing or hiring of any materials or supplies, the results of such an accumulation could not reasonably be ascertained. Disbursements were reviewed, however, to determine whether any clear-cut violations existed. Our examination of expenditures did not reveal any individual payments, contracts or agreements in excess of the bid threshold for the performance of any work or the furnishing or hiring of any materials or supplies, other than those where bids had been previously sought by public advertisement or where a resolution had been previously adopted under the provisions of NJSA 40A:11-6. NJSA 40A: requires that at least two competitive quotations be obtained for all contracts that in the aggregate are less than the bid threshold but 15 percent or more of that amount. Collection of Interest on Delinquent Taxes and Assessments The statute provides the method for authorizing interest and the maximum rates to be charged for the nonpayment of taxes or assessments on or before the date when they would become delinquent. The governing body on January 2, 2016, adopted the following resolution authorizing interest to be charged on delinquent taxes: WHEREAS, by Revised Statues 54:4-6, et seq., municipalities are permitted to charge interest for non-payment of taxes and assessments; NOW, THEREFORE, BE IT RESOLVED by the Borough Council of the Borough of National Park as follows: That the interest of delinquent taxes and assessments shall be eight (8%) per cent per annum. That the interest on delinquent taxes and assessments in excess of $1, shall be at the rate of eighteen (18) per cent per annum and if the delinquency is in excess of $10, and remains in arrears beyond December 31 st, an additional penalty of six (6) per cent shall be charged against the delinquency. 95

100 Collection of Interest on Delinquent Taxes and Assessments (Continued) That no interest shall be charged if payment of any installment of the above is made within ten (10) days after the date upon which the same is payable. It appears from an examination of the collector s records that interest was collected in accordance with the foregoing resolution. Delinquent Taxes and Tax Title Liens The last tax sale was held on October 6, 2016, and was not complete. Numerous properties with utility balances were not included in the sale. The following comparison is made of the number of tax title liens receivable on December 31st of the last three years. Number Year of Liens It is essential to good management that all means provided by statute be utilized to liquidate tax title liens in order to get such properties back on a tax-paying basis. Verification of Delinquent Taxes and Other Charges A test verification of delinquent charges and current payments was made in accordance with the regulations of the Division of Local Government Services. All notices returned were reviewed and no discrepancies were noted. A separate report will be rendered if any irregularities develop after the date of the audit. Comparison of Tax Levies and Collections Currently A study of this tabulation could indicate a possible trend in future tax levies. A decrease in the percentage of current collection could be an indication of a probable increase in future tax levies Tax Levy $ 6,464, $ 6,414, $ 6,379, Cash Collections 6,117, ,065, ,040, Percentage of Collections 94.64% 94.56% 94.69% Comparative Schedule of Tax Rate Information Tax Rate Apportionment of Tax Rate: Municipal County Local School Regional High School Assessed Valuation 158,853, ,173, ,034,778 96

101 Comparative Schedule of Delinquent Taxes and Tax Title Liens This tabulation includes a comparison, expressed in percentage, of the total delinquent taxes and tax title liens, in relation to the tax levies of the last three years Amount of Tax Title Liens $ 175, $ 161, $ 123, Delinquent Taxes 301, , , Total Delinquent $ 476, $ 485, $ 457, Percentage of Tax Levy 7.37% 7.61% 6.97% Comparative Schedule of Property Acquired by Tax Title Lien Liquidation The value of property acquired by liquidation of tax title liens on December 31 st, on the basis of the last assessed valuation of such properties, was as follows: Property Acquired for Taxes (Assessed Valuation) 16,873 16,873 16,873 WATER RENT & LIEN INFORMATION Balance January 1 $ 97, $ 117, $ 118, $ 93, Levy and Interest & Costs 448, , , , Cash Collections 444, , , , Percentage of Collections 81.36% 82.34% 77.81% 77.62% SEWER RENT & LIEN INFORMATION Balance January 1 $ 94, $ 89, $ 99, $ 76, Levy and Interest & Costs 459, , , , Cash Collections 466, , , , Percentage of Collections 84.16% 82.86% 84.44% 82.19% OTHER COMMENTS Accounting Procedures A general ledger has been established as required by NJAC 5: An encumbrance accounting system has been established as required by NJAC 5: A fixed asset accounting and reporting system was established as required by NJAC 5: but a record of the detail supporting prior year balances is not available. The original inventory records to support those amounts cannot be found. There is a deficit of an ordinance over 5 years which was raised in the 2017 budget. Corrective Action Plan A corrective action plan was filed for the year 2015 with the Division of Local Government Services by the Chief Financial Officer. 97

102