Knowledge and Insights
In August 2014, the Division of Local Government Services, Department of Community Affairs, State of New Jersey (DLGS) issued Local Finance Notice (LFN) 2014-13 as a reminder for local authorities and fire districts to be in compliance with New Jersey Administrative Code (N.J.A.C) 5:31-7.6.
N.J.A.C 5:31-7.6 requires all local authorities and special districts, including fire districts, to have an annual audit conducted for their respective fiscal years in accordance with the following standards:
1. Generally accepted auditing standards as promulgated by the American Institute of Certified Public Accountants;
2. Government Auditing Standards (GAS) as issued by the Comptroller General of the United States and the United States Government Accountability Office; and
3. Audit standards adopted as rules by the Local Finance Board and the DLGS.
These audits may be performed by a Registered Municipal Accountant (RMA) or a Certified Public Accountant (CPA).GAS establishes general standards for the credibility of auditor’s work, including competence of staff, quality control and assurance. LFN 2014-13 n681otes that not all RMAs and/or CPAs meet the standards set forth by the GAS in order to conduct an audit in accordance with Generally Accepted Government Auditing Standards (GAGAS).
GAS chapter 3.82 requires that each audit organization performing audits in accordance with GAGAS must establish and maintain a system of quality control that is designed to provide an audit organization with reasonable assurance that the organization and its personnel comply with professional standards and applicable legal and regulatory requirements and have an external peer review performed at least once every three years.
LFN 2014-13 advises local authorities and fire districts that they should incorporate a review of their audit organization’s most recent peer review report into their procurement process to ensure that the auditor it selects meets the standards set forth under GAS.
As independent auditors and financial advisors to government entities for more than twenty years, Mercadien is in full compliance with the above standards and successfully completed its 12th consecutive peer review in 2013.
For more information about the above governmental auditing standards and the solutions we can provide to your entity, please contact me at (609) 689-9700 or email@example.com.