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NorthJersey.com
CLIFTON — The state Department of Community Affairs has ruled that the city needs to wait to authorize a forensic audit of its finances until it has the necessary funds, which won't be available until after Nov. 1.
Council members, impatient that the administration had yet to award an auditing contract, recently took the matter into their own hands and voted 4 to 3 to award it to the Holman Frenia Allison firm. In doing so, the council majority ignored the administration's warning that such a measure was prohibited by state law.
The problem, City Manager Nick Villano said, is that the council did not include the audit, estimated to cost between $75,000 and $150,000, in its 2024 budget. He said that before a contract can be awarded, the city needs to certify that the funds are available.
Although there is a surplus of funds in the $139 million city budget, transferring those funds is not allowed before Nov. 1.
The council members and the administration have had a contentious relationship concerning the budget, its surplus and how the city conducts its accounting.
Some council members say revenues are understated and expenses are overstated in the budget.
The two sides argue over the millions of dollars that are in the surplus fund each year. Those funds are used in the following year's budget.
"They always seem to find the money when they need to," Councilman Bill Gibson said of the administration.
Why does Clifton council want a city budget audit?
The council wishes to authorize audits of the 2019 and 2023 budgets. The audits, council members said, would provide a definitive picture of how deftly the city handles its accounts. Gibson said he's hoping for a clean bill of health.
Talk of the audits has been ongoing since late summer. Council members Mary Sadrakula, Tony Latona, Bill Gibson and Chris D'Amato voted to award the contract, against the administration's advice. They did so because they have concerns the administration is attempting to delay and defer the audit, they said.
"Enough is enough," Sadrakula said. "This is just a stall tactic. It is time for it to stop."
Gibson agrees that the administration has been reluctant to see the audit undertaken.
"They've been putting on a lot of pressure not to have it," Gibson said, adding that it makes the administration's motives "suspicious."
The City Council has sparred with the administration on other issues as well.
The council had wanted to replace the city's legal department, but the effort fizzled due to pushback from the administration.
New Jersey rules Clifton can't audit — yet
Before the last council meeting, the city's chief financial officer, Joseph Kunz, said he could not certify the funds for the audit. Before the city can award a contract, he said, it must prove it has the money available. He agreed that although there is enough money in the surplus fund, it can't be transferred before November.
"This process has been going on for a while and the council will not take my advice," Kunz wrote last week to Tina Zapicchi, an assistant director in the Division of Local Government Services in Community Affairs.
Zapicchi sided with Kunz in their communications. Kunz wrote that there would be a certification of funds and the contract should be official on the council's next agenda.
Councilman Joe Kolodziej said he voted against awarding the contract partly because as a certified financial officer, he has to follow state law. His other reason, he said, is that the forensic audit is overkill.
"I'm in favor of a financial management study, but I'm opposed to paying forensic audit prices for it," Kolodziej said. "The public is being deceived, and we could get the same result for half the price if we actually asked for proposals for a study."
The council is expected to raise the issue of funds certification and award the audit contract at its next meeting, in November.