123-25 Township of West Orange - 12-31-2023 CAP.pdf

Department: Office of the Comptroller Respondent: John Ditinyak, Director of Finance Responsible Employee(s): John Ditinyak, Director of Finance; Melanie Chavez, Assistant Comptroller Finding Number: 2023-10 (Page 162) 1. Condition: There are unapplied grants in the Current Fund (A-38) for $250,000.00 and in the Federal and State Grant Fund (A-43) for $346,170.45 that need to be investigated for source and purpose. 2. Recommendation: That all unknown grants on the balance sheet be investigated and appropriate action taken based on those findings. 3. Township Response and Corrective Action: The Assistant Comptroller will work with the Township’s grant consultant on the unapplied grants. Based on the findings, the Finance Department will record the transactions appropriately. 4. Implementation Date: Immediately

Department: Office of the Comptroller Respondent: John Ditinyak, Director of Finance Responsible Employee(s): John Ditinyak, Director of Finance; Finding Number: 2023-11 (Page 162) 1. Condition: The Federal and State Grant Fund has several receivable and reserve balances that have had no activity for several years. These accounts should be reviewed at year-end. 2. Recommendation: That all inactive grant balances be reviewed and appropriate action be taken based on those findings. 3. Township Response and Corrective Action: All grant receivable and reserve balances will be reviewed to determine if the project has been completed and/or the grant has term expired. As necessary, a resolution cancelling receivable and spending reserve balances will be presented to the Township Council for approval. 4. Implementation Date: June 24, 2025 Council Meeting

Department: Department of Health Respondent: John Ditinyak, Director of Finance Responsible Employee(s): John Ditinyak, Director of Finance; Michael Fonzino, Director of Health Finding Number: 2023-12 (Page 162) 1. Condition: Several monthly Dog License Reports were not filed with the State of New Jersey in a timely manner. For the months of January, February, and March (CY 2023), the reports were filed on May 5, 2023. 2. Auditor’s Recommendation: That all monthly Dog License Reports be filed with the State of New Jersey on a monthly basis. 3. Township Response and Corrective Action: The Township disagrees with this recommendation in that the guidance from the State of New Jersey Department of Health Communicable Disease Service Infectious and Zoonotic Diseases Program on form VPH-10, the monthly dog license report referenced, allows for one license report to cover two or more months. Despite this, the West Orange Board of Health always makes the effort to file the dog license reports on a monthly basis. 4. Implementation Date: Completed

Department: Office of the Comptroller Respondent: John Ditinyak, Director of Finance Responsible Employee(s): John Ditinyak, Director of Finance; Melanie Chavez, Assistant Comptroller Finding Number: 2023-13 (Page 162) 1. Condition: Certain grant receivable balances have remained open as December 31, 2023 on the General Capital Balance Sheet. 2. Auditor’s Recommendation: That all open grant receivable balances in the General Capital Fund be reviewed and a determination made as to proper disposition. 3. Township Response and Corrective Action: The Finance Department will investigate all existing grant receivable balances to determine collectability. If necessary, a resolution cancelling grant balances will be presented to the Township Council for approval. 4. Implementation Date: June 24, 2025 Council Meeting

Department: Office of the Comptroller Respondent: John Ditinyak, Director of Finance Responsible Employee(s): John Ditinyak, Director of Finance; Melanie Chavez, Assistant Comptroller Finding Number: 2023-14 (Page 163) 1. Condition: A detailed analysis of the Payroll Account was not prepared throughout the year. As a result, no detail was available as of December 31, 2023. 2. Auditor’s Recommendation: That the Payroll Account be analyzed on a monthly basis. 3. Township Response and Corrective Action: The Finance Department is undertaking this corrective action in two phases. The first is a manual reconciliation of the Net Payroll and Payroll Deduction Accounts in Excel. All Cash Receipts and Cash Disbursements will be tracked on a monthly basis. The second phase comes with the Township’s transition to a new ERP system. The new system will track the receipts and disbursements electronically and allow for a system level bank reconciliation for the Net Payroll and Payroll Deduction accounts. 4. Implementation Date(s): Phase 1 – Q3 2025; Phase 2 – Q2 2026

Department: Office of the Comptroller; Office of the Business Administrator; Legal Department Respondent: John Ditinyak, Director of Finance Responsible Employee(s): John Ditinyak, Director of Finance; Chief James Abbott; Richard Trenk, Municipal Attorney Finding Number: 2023-15 (Page 163) 1. Condition: During our test of employees, it came to our attention that employees receive waiver payments for those who elect to waive their health benefits. The waiver payments for any type of union members were not traceable to any current collective bargaining agreements or Township approved resolutions. 2. Auditor’s Recommendation: That waiver payments made to employees be outline within collective bargaining agreements or by way of resolution approved by the Township Council. 3. Township Response and Corrective Action: The Township will discuss with the Legal Department to determine what steps, if any, are necessary to ensure compliance with State and Local laws. 4. Implementation Date: May 2025

Department: Office of the Comptroller; Office of the Business Administrator; Legal Department Respondent: John Ditinyak, Director of Finance Responsible Employee(s): John Ditinyak, Director of Finance; Chief James Abbott; Richard Trenk, Municipal Attorney Finding Number: 2023-16 (Page 163) 1. Condition: While reviewing contracts of Township employees, it was discovered that an employee selected was being paid above their current base salary approved in the contract. 2. Auditor’s Recommendation: That employee salaries be paid in accordance with the approved contracts on file. 3. Township Response and Corrective Action: The Township’s bi-weekly payroll is reviewed by a 3rd party contractor for salary conformance to Collective Bargaining Agreements, the Non-Union Salary Ordinance, and individual employment contracts. The Director of Finance will be meet with the Engagement Team from Samuel Klein & Company, and determine what employee was tested and found not be in compliance contracts, agreements, and Township code in effect during the audit period. 4. Implementation Date: Immediately

Department: Office of the Comptroller Respondent: John Ditinyak, Director of Finance Responsible Employee(s): John Ditinyak, Director of Finance; Nassaye Lyons, Payroll Supervisor Finding Number: 2023-17 (Page 163) 1. Condition: A list of compensated absences which consist of accumulated sick days, unused vacation and other approved PTO time at the 2023 salary rates as of December 31, 2023 was not available for audit. 2. Auditor’s Recommendation: That a list of compensated absences be made available for audit. 3. Township Response and Corrective Action: The Township’s current payroll software can provide the number of accumulated sick days, unused vacation and other approved PTO time, however, it values those days based on the salary rates effective as of date the report is created. The Township is currently changing Payroll Systems and that will not be an issue for year-end 2025. 4. Implementation Date: Payroll System is estimated to go live in July 2025.

Department: Office of the Comptroller Respondent: John Ditinyak, Director of Finance Responsible Employee(s): John Ditinyak, Director of Finance; Finding Number: 2023-18 (Page 164) 1. Condition: During our review of the Township’s Trust Fund Reserves, we noted several reserves that did not appear to have approval from the Division of Local Government Services. 2. Auditor’s Recommendation: That the Township review the reserves maintained in the Trust Fund and obtain appropriate approval from the Division of Local Government Services. 3. Township Response and Corrective Action: The Township will review all Trust Fund reserves and make sure to put forward a Dedication by Rider resolution before the Township Council. 4. Implementation Date: May 20, 2025 Council Meeting

Department: Office of the Comptroller; Office of the Business Administrator Respondent: John Ditinyak, Director of Finance Responsible Employee(s): John Ditinyak, Director of Finance; Peter Smeraldo, Assistant Business Administrator Finding Number: 2023-19 (Page 164) 1. Condition: Surety Bond coverage for individual Public Officials were not supplied for audit. 2. Auditor’s Recommendation: That all Surety Bond Declarations for individual Public Officials be made available for audit. 3. Township Response and Corrective Action: The Finance Department will work with the Municipal Joint Insurance Fund to confirm that our Public Officials surety bond coverage is accurate regarding the individuals covered and that the amount is in compliance with State Statute. 4. Implementation Date: Immediately