ANNUAL AUDIT REQUIREMENTS
Sep
3
Written by:
- Oliver Walling
9/3/2014 8:14 AM
On August 25, 2014 the Local Finance Board issued Local Finance Notice (LFN) 2014-13 Annual Audit Requirements for Local Authorities and Fire Districts. This LFN is a reminder to Boards of their responsibilities as a governmental entity with regards to the annual audit. Most importantly you must hire a knowledgeable audit firm. Your audit must be conducted according to generally accepted auditing standards, Government Auditing Standards, and audit standards adopted by the Local Finance Board and the Department of Community Affairs and its divisions.
The audit must be performed by a New Jersey licensed registered municipal accountant (RMA) or certified public accountant (CPA). The performance standards stated above further require that the auditor must be knowledgeable and competent in these standards and all applicable regulations. Additionally, the audit firm must be in compliance with the external peer review program established by the State of New Jersey.
This LFN requires the Board of Fire Commissioners to assume responsibility for compliance with the Local Authorities Fiscal Control Law and N.J.A.C. 5:31-7.6. You must now perform adequate due diligence when awarding a service contract for audit services. You need to review a firm's peer review report every year prior to the awarding of the contract for services. The Division can reject your annual audit if it is not in compliance with these standards and regulations. Failure to submit an acceptable audit will put the Board in noncompliance and all the consequences of that situation.
If the Board does not feel that they can decide on the adequacy of an audit firm, there are independent consultants who can assist you. At Koerner and Koerner we have combined fire district experience of over 40 years. We are fire district consultants. We no longer perform audits of fire districts, so we are truly independent and able to fairly assist you. If you need a referral for a qualified and compliant audit firm, we can also help you with that.