Comptroller calls for auditing reforms statewide

August 13, 2008  NEWHOUSE NEWS SERVICE

New Jersey's town halls and school boards have overly cozy financial and political ties to the auditors who monitor their spending, severely compromising the oversight designed to ensure billions of dollars in taxpayer money is spent properly, the state comptroller said yesterday.

"The independence and effectiveness of audits in New Jersey cannot be trusted unless changes are made," comptroller Matthew Boxer said at a Trenton news conference to release his office's first public report.

Boxer's report, based on 966 responses to a survey sent to the 1,900 government entities across the state, noted the Haddon Township Board of Education has had the same auditor reviewing its books for 61 years, and at least 389 government bodies have not changed auditors in more than a decade.

Barely half the government entities surveyed used competitive bidding to select their auditing firms, and the most prolific firms tended to be the most generous political donors, the comptroller's report found.

"Financial oversight in New Jersey should not be left to firms that have made political contributions to the entities they are overseeing," said Boxer.

Gov. Jon Corzine, speaking to reporters after a bill-signing ceremony in West Orange yesterday, agreed.

"Independent audits are supposed to be exactly that - independent," he said, adding auditors "probably shouldn't be in the business of writing checks in campaign season."

According to Boxer's report, eight firms that handled 521 government auditing assignments this year contributed a total of $1.076 million to local and state campaigns in 2006 and 2007.

Boxer proposed legislation that would prohibit political contributions by government auditing firms and would require competitive bidding for auditing work every five years, with mandatory replacement of a government entity's auditor every decade.