Comptroller: audit system needs repair

Both state and local entities have developed overly comfortable relationships with their external auditing firms that could damage the potential for truly independent, excess-revealing audits, according to state Comptroller Matthew Boxer.

That was one of the major conclusions drawn by a report put together by Mr. Boxer’s office, following months of compiling data and interpreting surveys that had been put out to New Jersey governmental entities and their auditing firms.

“There is no practical or feasible way that centralized oversight can be imposed on the 1,900 separate units of government in New Jersey, so external audits are crucial in this state,” said Mr. Boxer, in a statement. “When those audits are not performed effectively, money gets wasted. Moreover, the public gets a misleading picture about the financial health of their government.”

Some alarming conclusions drawn in the comptroller’s report included the realization that nearly a full 25 percent of government entities utilized the same auditing firm for more than 10 years, and many were selected without a competitive process.

Even worse, several of the largest auditing firms holding many auditing contracts made millions of dollars in political contributions in 2006 and 2007, the only two years cited in the report.

Mr. Boxer said “the merits of a contract proposal, and not the level of political contributions, should be the primary factor in selecting auditors.”

Some recommendations coming out of the report included hiring external auditors through a competitive system at a minimum of every five years, mandatory replacement of an auditing firm with another every 10 years, and that governmental entities should “refrain from hiring any audit firm that made political contributions on the local or state level in the previous year.”

While Mr. Boxer’s report did illuminate an interesting and problematic area of Garden State government practic, it only seems to add to the perception that this state’s political apparatus included a high concentration of self-serving and morally corrupt individuals who have no right to be put in positions where they’re supposed to serve the public interest.

New Jerseyans really need to step back and ensure that politicians in positions of power know that ethics reform and reshaping the way government does business should be of the highest priority.

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