State of new jersey




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LEGISLATIVE FISCAL ESTIMATE

SENATE, No. 1345

STATE OF NEW JERSEY

215th LEGISLATURE
DATED: NOVEMBER 15, 2013

SUMMARY


Synopsis:

Requires State Comptroller to perform compliance audit to verify municipal implementation of corrective action plan following performance audit.

Type of Impact:

Indeterminate potential increase in State costs.

Indeterminate fiscal impact on counties.



Indeterminate increase in costs incurred by certain municipalities.

Agencies Affected:

Department of Law and Public Safety, Office of the State Comptroller, county governments, and certain municipalities.



Office of Legislative Services Estimate

Fiscal Impact

Year 1

Year 2

Year 3

State Cost

Indeterminate Potential Increase – See comments below

County Cost

Indeterminate Fiscal Impact – See comments below

Municipal Cost

Indeterminate Increase – See comments below







  • The Office of Legislative Services determined that the enactment of Senate Bill No. 1345 may result in an indeterminate potential increase in State costs if the Office of the State Comptroller finds it necessary to employ additional auditors in order to conduct the compliance audits required by the bill.

  • Municipalities subject to a performance audit pursuant to State statute or an order of the Director of the Division of Local Government Services will experience an increase in expenditures because the bill requires them to assume responsibility for the cost of the compliance audit.

  • To the extent that alleged criminal conduct referrals by the Director of the Division of Local Government Services result in an increase in expenditures by the Department of Law and Public Safety, or county prosecutors’ offices, the State or county governments may incur additional costs related to investigation and prosecution. Some of these costs may be recovered through the payment of fines and restitution if a prosecution is successful.

BILL DESCRIPTION
Senate Bill No. 1345 of 2012 requires the Office of the State Comptroller to conduct a compliance audit of a municipality to verify that it has implemented a corrective action plan following a performance audit. The compliance audit must begin no less than 120 days following the submittal of a copy of the performance audit to the Office of the State Comptroller and be completed within 12 months. The municipality would be responsible for the total cost of the compliance audit. The bill also requires the Director of the Division of Local Government Services in the Department of Community Affairs to refer findings that may constitute alleged criminal conduct to the Attorney General or other appropriate prosecutorial authority for further civil or administrative action.

FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The Office of Legislative Services has determined that the enactment of Senate Bill No. 1345 may result in an indeterminate potential increase in State costs. It may also result in an indeterminate increase in costs for certain municipalities. The bill may have an indeterminate fiscal impact on counties.

The State would incur additional costs if the Office of the State Comptroller finds it necessary to employ additional auditors in order to conduct the compliance audits required by the bill. The Fiscal Year 2014 Appropriations Act (P.L.2013, c.77) allocates $9.791 million to the Office of the State Comptroller to fund 100 State-supported positions (41 employees are in the Audit Division). To the extent that alleged criminal conduct referrals by the Director of the Division of Local Government Services result in an increase in expenditures by the Department of Law and Public Safety, or county prosecutors’ offices, the State or county governments may incur additional costs related to investigation and prosecution. Some of those costs may be recovered through the payment of fines and restitution if a prosecution is successful.

Municipalities subject to a performance audit pursuant to an order of the Director of the Division of Local Government Services will experience an increase in expenditures because the bill requires them to assume responsibility for the cost of the compliance audit. In 2011, the Office of the State Comptroller indicated that each audit costs about $20,000; however this can vary depending on the complexity of the audit, size of the municipality subject to the audit, and the number of recommendations that must be implemented by the municipality pursuant to the original performance audit. Most of the costs associated with the audit would be in the areas of salaries and wages, supplies, and travel.


Section:

Local Government

Analyst:

Scott A. Brodsky

Senior Fiscal Analyst

Approved:

David J. Rosen

Legislative Budget and Finance Officer

This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.


This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).











Office of Legislative Services

State House Annex

P.O. Box 068

Trenton, New Jersey 08625




Legislative Budget and Finance Office

Phone (609) 292-8030

Fax (609) 777-2442

www.njleg.state.nj.us





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