Washington Twp. Audit Finds Series Of Financial Deviations Highlighted Were Contract Awards And A Developer's Loan. An Official Said The State Was "Concerned."

WASHINGTON TOWNSHIP — The township's administration failed to award some contracts to the lowest bidder last year and lent a developer $337,425 in bond money earmarked for capital improvements, an audit of the township's finances shows.

The audit also revealed numerous instances of irregular financial transactions and record keeping, including inadequate cash-receipt journals, fee waivers for park-and-recreation board members, and unauthorized salary overpayments for three employees.

Conducted by Petroni & Associates, the audit found 47 financial deviations and 12 times when practices established under state law were not followed. The firm, appointed by the Democrat-controlled Township Council in 1999, completed the audit on June 30.

New Jersey requires municipalities to conduct annual audits and submit them to the state six months after the close of the fiscal year.

"The number of findings contained in this audit report was well above the norm," said John Patella, a spokesman for the state Department of Community Affairs. "We are concerned about the number we see."

He said the department was analyzing the audit and may send staff members to verify the findings. The state also requires municipalities to file, within 60 days, plans that addresses the deviations and to correct them within six months, Patella added.

Republican Mayor Gerald Luongo was away on vacation yesterday and did not return pages. Chief Financial Officer Mary Breslin did not respond to phone calls seeking comment.

The audit found eight infractions of local public-contracts law. Most findings, however, did not specify how many contracts were involved, the amount of money awarded, or to whom the contracts were given.

The audit simply stated that contracts for baseball, softball and soccer uniforms and equipment were not awarded to the lowest bidder and that two contracts for recycling and the disposal of yard waste exceeded the bid threshold and were not publicly advertised.

It also noted that four contracts lacked documentation justifying their being awarded to someone other than the lowest bidder.

The audit recommends that the governing body take immediate action to determine why the contracts did not comply with state law.