2010 Audit Report - The Borough of Pennsgrove
Transcription
2010 Audit Report - The Borough of Pennsgrove
BOROUGH OF PENNS GROVE COUNTY OF SALEM REPORT OF AUDIT FOR THE YEAR ENDED DECEMBER 31, 2010 19400 BOROUGH OF PENNS GROVE TABLE OF CONTENTS Exhibit No. Page No. PART I Independent Auditor's Report 2 Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed In Accordance With Government Auditing Standards 4 CURRENT FUND A A-1 A-2 A-3 Statements of Assets, Liabilities and Reserves and Fund Balances-Regulatory Basis Statements of Operations and Changes in Fund Balance-Regulatory Basis Statement of Revenues--Regulatory Basis Statement of Expenditures--Regulatory Basis 6 8 10 13 TRUST FUND B Statements of Assets, Liabilities and Reserves--Regulatory Basis 18 GENERAL CAPITAL FUND C Statements of Assets, Liabilities and Reserves--Regulatory Basis 19 GENERAL FIXED ASSET ACCOUNT GROUP F Schedule of General Fixed Assets Group of Accounts 20 Notes to Financial Statements 21 SUPPLEMENTAL EXHIBITS CURRENT FUND SA-1 SA-2 SA-3 SA-4 SA-5 SA-6 SA-7 SA-8 SA-9 SA-10 SA-11 SA-12 SA-13 SA-14 SA-15 Statement of Current Cash Statement of Taxes Receivable and Analysis of Property Tax Levy Statement of Tax Title Liens Statement of Revenue Accounts Receivable Statement of Due from State of New Jersey--Senior Citizens' and Veterans' Deductions Statement of Appropriation Reserves Statement of Tax Overpayments Statement of Prepaid Taxes Statement of Amount Due County for Added and Omitted Taxes Statement of Due County Taxes Statement of Regional School District Tax Statement of Accounts Payable Statement of Reserve for POAA Statement of Reserve for Recycling Statement of Reserve for Revaluation i 35 36 37 38 39 40 42 42 43 43 44 45 45 45 46 19400 BOROUGH OF PENNS GROVE TABLE OF CONTENTS (CONT'D) Exhibit No. Page No. CURRENT FUND (CONT’D) SA-16 SA-17 SA-18 SA-19 SA-20 SA-21 SA-22 Statement of Notes Payable--Special Emergencies 46 Statement of Loan Receivable—HUD Special Purpose Grant 47 Statement of Reserve for Program Income 47 Federal and State Grant Fund--Statement of Due to Current Fund 48 Federal and State Grant Fund—Statement of Federal and State Grants Receivable 49 Federal and State Grant Fund—Statement of Reserve for Federal and State Grants— Unappropriated 50 Federal and State Grant Fund—Statement of Reserve for Federal and State Grants— Appropriated 51 TRUST FUND SB-1 SB-2 SB-3 SB-4 SB-5 SB-6 Statement of Trust Cash Trust--Animal Control Fund--Statement of Reserve for Dog Fund Expenditures Trust--Animal Control Fund--Statement of Due from Current Fund Trust--Animal Control Fund--Statement of Due to State of New Jersey Trust--Other Funds--Statement of Due from Current Fund Trust--Other Funds--Statement of Changes in Reserves 53 54 54 55 56 57 GENERAL CAPITAL FUND SC-1 SC-2 SC-3 SC-4 SC-5 SC-6 SC-7 SC-8 SC-9 SC-10 SC-11 Statement of General Capital Cash Analysis of General Capital Cash Statement of Reserve for Riverwalk Project Statement of Deferred Charges to Future Taxation--Funded Statement of Deferred Charges to Future Taxation--Unfunded Statement of Capital Improvement Fund Statement of Due from Current Fund Statement of Improvement Authorizations Statement of Green Trust Loan Payable Statement of Bond Anticipation Notes Statement of Bonds and Notes Authorized But Not Issued 59 60 61 61 62 63 63 64 65 67 68 PART 2 SCHEDULE OF FINDINGS AND RECOMMENDATIONS Schedule of Financial Statement Findings 70 Summary Schedule of Prior Year Audit Findings and Questioned Cosats As Prepared by Management 72 OFFICIALS IN OFFICE AND SURETY BONDS 73 APPRECIATION 74 ii BOROUGH OF PENNS GROVE PART 1 REPORT OF AUDIT OF FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 -1- INDEPENDENT AUDITOR'S REPORT The Honorable Mayor and Members of the Borough Council Borough of Penns Grove Penns Grove, New Jersey 08069 We have audited the accompanying statements of assets, liabilities, reserves and fund balance-- regulatory basis of the various funds of the Borough of Penns Grove, in the County of Salem, State of New Jersey as of December 31, 2010 and 2009, and the related statements of operations and changes in fund balance-- regulatory basis for the years then ended, and the related statement of revenues-- regulatory basis, statement of expenditures-regulatory basis for the year ended December 31, 2010. These financial statements are the responsibility of the Borough's management. Our responsibility is to express an opinion on these financial statements based on our audit. Except as discussed in the following paragraph, we conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and in compliance with audit requirements as prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Borough’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. The financial statements referred to above do not include the general fixed assets group of accounts, as required by N.J.A.C. 5:30-5.6, because a record of general fixed assets was not maintained by the Borough. The amount that should be recorded in the general fixed assets group of accounts is not known. As described in Note 1, the financial statements previously referred to have been prepared in conformity with accounting practices prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey, which differ from accounting principles generally accepted in the United States of America. The effects on the financial statements of the variances between these regulatory accounting practices and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material. -2- -3- REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS The Honorable Mayor and Members of the Borough Council Borough of Penns Grove Penns Grove, New Jersey 08069 We have audited the financial statements (regulatory basis) of the Borough of Penns Grove, in the County of Salem, State of New Jersey, as of and for the year ended December 31, 2010, and have issued our report thereon dated November 7, 2011, which indicated that the financial statements were not prepared in accordance with accounting principles generally accepted in the United States of America but were prepared on a regulatory basis of accounting prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey. In the report, the opinion was qualified because the general fixed assets group of accounts was not presented. We conducted our audit in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and in compliance with audit requirements as prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey. Internal Control Over Financial Reporting In planning and performing our audit, we considered the Borough of Penns Grove's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Borough’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Borough’s internal control over financial reporting. Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over financial reporting that might be significant deficiencies or material weaknesses and therefore, there can be no assurance that all deficiencies, significant deficiencies, or material weaknesses have been identified. However, as described in the accompanying Schedule of Findings and Recommendations, we identified one deficiency in internal control over financial reporting that we consider to be a material weakness. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Borough’s financial statements will not be prevented, or detected and corrected on a timely basis. We consider the following deficiency described in the accompanying Schedule of Findings and Recommendations to be a material weakness: 2010-04. -4- -5- 19400 Exhibit A BOROUGH OF PENNS GROVE CURRENT FUND Statements of Assets, Liabilities, Reserves and Fund Balance -- Regulatory Basis As of December 31, 2010 and 2009 Ref. 2010 2009 ASSETS: Regular Fund: Cash - Treasurer Cash - Tax Collector Due from State of New Jersey SA-1 SA-1 SA-4 Receivables and Other Assets with Full Reserves: Delinquent Property Taxes Receivable Tax Title Liens Foreclosed Property Revenue Accounts Receivable Due from Redevelopment Agency Prepaid School Taxes Due from Federal and State Grant Fund Due from Trust -- Animal Control Fund Due from Trust -- Other Funds $ SA-2 SA-3 SA-10 SA-5 SA-1 SA-11 SA-17 SB-3 SB-5 Deferred Charges: Special Emergencies Revaluation Tax Map Revisions SA-14 SA-14 Total Regular Fund Federal and State Grant Fund: Cash Due from Current Fund Federal and State Grants Receivable Loans Receivable SA-1 SA-17 SA-18 SA-15 Total Federal and State Grant Fund $ 1,078,820.38 247,995.89 1,305.88 $ 764,475.05 357,696.89 3,094.92 1,328,122.15 1,125,266.86 408,705.24 116,579.08 263,600.00 23,633.12 16,500.00 313.35 14,257.52 422,296.32 102,414.66 289,200.00 14,329.31 11,500.00 21,423.00 22,671.93 292.72 - 843,588.31 884,127.94 120,000.00 6,000.00 160,000.00 8,000.00 126,000.00 168,000.00 2,297,710.46 2,177,394.80 194,999.34 4,701.56 591,219.91 72,480.76 220,123.01 175,425.35 31,056.33 863,401.57 426,604.69 3,161,112.03 $ 2,603,999.49 (Continued) -6- 19400 Exhibit A BOROUGH OF PENNS GROVE CURRENT FUND Statements of Assets, Liabilities, Reserves and Fund Balance -- Regulatory Basis As of December 31, 2010 and 2009 Ref. 2010 2009 LIABILITIES, RESERVES AND FUND BALANCE: Regular Fund: Liabilities: Appropriation Reserves Reserve for Encumbrances Accounts Payable Tax Overpayments Prepaid Taxes Regional School Taxes Payable Due to Federal and State Grant Fund Due to Trust -- Other Funds Due to General Capital Fund Reserve for Tax Map Revisions Reserve for LOSAP Reserve for Revaluation Notes Payable: Special Emergencies Revaluation Tax Map Revisions A-3, SA-6 $ A-3, SA-6 SA-12 SA-7 SA-8 SA-11 SA-17 SB-5 SC-7 A A SA-13 SA-14 SA-14 Reserves for Receivables and Other Assets Fund Balance A A-1 Total Regular Fund Federal and State Grant Fund: Due to Current Fund Due to General Capital Fund Unappropriated Reserves Appropriated Reserves Reserve for Receivables Reserve for Program Income SA-17 A SA-20 SA-19 SA-15 SA-16 Total Federal and State Grant Fund $ 183,379.25 68,525.92 15,873.07 1,110.23 57,310.88 233,443.42 4,701.56 56,292.57 10,000.00 9,613.91 48,922.50 173,580.27 143,054.54 7,476.88 6,283.81 67,968.67 1,850.33 36,377.71 10,000.00 9,613.91 58,922.50 120,000.00 6,000.00 160,000.00 8,000.00 815,173.31 683,128.62 843,588.31 638,948.84 884,127.94 610,138.24 2,297,710.46 2,177,394.80 40,000.00 3,798.28 634,491.51 72,480.76 112,631.02 22,671.93 40,000.00 8,543.47 187,982.12 31,056.33 136,350.84 863,401.57 426,604.69 3,161,112.03 The accompanying Notes to Financial Statements are an integral part of this statement. -7- $ $ 2,603,999.49 19400 Exhibit A-1 BOROUGH OF PENNS GROVE CURRENT FUND Statements of Operations and Changes in Fund Balance -- Regulatory Basis For the Years Ended December 31, 2010 and 2009 2010 Revenue and Other Income Realized: Fund Balance Anticipated Miscellaneous Revenues Anticipated Receipts from Delinquent Taxes and Tax Title Liens Receipts from Current Taxes Non-Budget Revenue Other Credits to Income: Unexpended Balance of Appropriation Reserves Cancellation of Tax Overpayments Cancellation of Accounts Payable Cancellation of Grants (Net) Interfunds Liquidated Prepaid School Taxes Liquidated $ 500,760.00 3,528,554.05 435,304.66 5,587,124.75 54,638.20 2009 $ 292,000.00 3,213,570.89 466,506.73 5,330,124.01 41,680.91 117,036.69 89,377.09 22,671.93 21,423.00 10,644.16 2,635.99 7,276.02 - 10,356,890.37 9,364,438.71 2,256,558.00 2,271,740.00 260,730.09 2,252,380.00 2,291,170.00 255,013.00 642,567.38 560,761.00 127,984.65 42,000.00 1,567,632.30 2,062,622.54 20,480.98 5,000.00 9,242.83 - 12,810.21 153,132.11 139,000.00 96,638.79 42,100.00 1,632,113.26 2,072,247.58 3,984.55 11,500.00 21,423.00 750.00 9,827,319.77 8,984,262.50 Statutory Excess of Fund Balance 529,570.60 380,176.21 Fund Balance January 1 610,138.24 521,962.03 1,139,708.84 902,138.24 500,760.00 292,000.00 Total Income Expenditures: Budget Appropriations: Within "CAPS": Operations: Salaries and Wages Other Expenses Deferred Charges and Statutory Expenditures Excluded from "CAPS": Operations: Salaries and Wages Other Expenses Capital Improvements Municipal Debt Service Deferred Charges County Taxes Regional High School Tax Interfunds Created Redevelopment Agency Receivable Created Prepaid School Taxes Created Refund of Prior Year Revenue Prior Year Seniors' Citizens and Veterans' Deductions Disallowed Total Expenditures Decreased by: Utilization as Anticipated Revenue Fund Balance December 31 $ The accompanying Notes to Financial Statements are an integral part of this statement. -8- 638,948.84 $ 610,138.24 19400 Exhibit A-2 BOROUGH OF PENNS GROVE CURRENT FUND Statement of Revenues -- Regulatory Basis For the Year Ended December 31, 2010 Budget Surplus Anticipated Miscellaneous Revenues Licenses: Alcoholic Beverages Other Fees and Permits Fines and Costs - Municipal Court Interest and Costs on Taxes Payment in Lieu of Taxes Penns Grove Gardens Penn Village Consolidated Municipal Property Tax Relief Aid Energy Receipts Tax (P.L. 1997, Chapters 162 & 167) Transitional Aid Uniform Construction Code Fees Public and Private Revenues Offset N.J. Transportation Trust Fund Authority Act NJ Senior Citizen and Disabled Resident Transportation Act Recycling Tonnage Grant Body Armor Replacement Over the Limit Under Arrest Click it or Ticket 2010 Alcohol Rehab & Education Fund Clean Communities Small Cities Grant Penns Grove Sewerage Authority Contribution $ Anticipated Special N.J.S. 40A: 4-87 500,760.00 $ 500,760.00 4,000.00 86,000.00 60,000.00 140,000.00 75,000.00 5,757.76 104,314.00 84,982.53 124,388.32 73,386.98 123,000.00 42,000.00 526,736.00 718,118.00 1,000,000.00 22,000.00 152,000.00 42,500.00 526,736.00 718,118.00 1,000,000.00 6,443.39 150,761.00 150,761.00 1,757.76 18,314.00 24,982.53 (15,611.68) (1,613.02) 29,000.00 500.00 (15,556.61) 79,295.32 4,979.64 866.27 4,400.00 4,000.00 100.55 8,074.29 400,000.00 37,450.00 26,582.98 3,528,554.05 41,772.98 400,000.00 435,304.66 35,304.66 Amount to be Raised by Taxes for Support of Municipal Budget: Local Tax for Municipal Purposes including Reserve for Uncollected Taxes 2,407,781.00 2,572,422.22 164,641.22 Budget Totals 6,768,739.09 7,037,040.93 241,718.86 54,638.20 54,638.20 Receipts from Delinquent Taxes $ $ 26,582.98 Total Miscellaneous Revenues 52,712.34 4,979.64 866.27 4,400.00 4,000.00 100.55 8,074.29 400,000.00 37,450.00 Excess or (Deficit) Realized 3,460,198.09 26,582.98 Non-Budget Revenue $ 6,768,739.09 $ 26,582.98 $ 7,091,679.13 $ 296,357.06 (Continued) -9- 19400 Exhibit A-2 BOROUGH OF PENNS GROVE CURRENT FUND Statement of Revenues -- Regulatory Basis For the Year Ended December 31, 2010 Analysis of Realized Revenue Allocation of Current Tax Collections: Revenue from Collections Allocated to: County and School Taxes $ 5,587,124.75 3,630,254.84 Amount for Support of Municipal Budget Appropriations 1,956,869.91 Add: Appropriation "Reserve for Uncollected Taxes" 615,552.31 Amount for Support of Municipal Budget Appropriations Receipts from Delinquent Taxes: Delinquent Tax Collections Tax Title Lien Collections Licenses - Other: Vendor Licenses Cat Licenses Landlord Licenses Fees and Permits: Municipal Improvement Searches Street Opening Permits Park Rental Yard Sale Planning Registrar Fees Zoning Bd. of Adjustments Taxi / Limousines Housing OPRA Fees Police Clerk Fees Miscellaneous Cable Fee Trash Collection Clerks Interest $ 2,572,422.22 $ 402,390.37 32,914.29 $ 435,304.66 $ 745.00 819.00 102,750.00 $ 104,314.00 $ 20.00 14,990.00 100.00 252.00 820.63 10,533.80 180.22 625.00 12,894.38 49.82 786.08 30,786.94 10,213.10 2,598.00 132.56 $ 84,982.53 (Continued) -10- 19400 Exhibit A-2 BOROUGH OF PENNS GROVE CURRENT FUND Statement of Revenues -- Regulatory Basis For the Year Ended December 31, 2010 Analysis of Non-Budget Revenues Miscellaneous Revenue not Anticipated: Senior Citizens' and Veterans' Deductions Admin. Fee Interest on Investments and Deposits - Current Fund Account Forfeited Tax Sale Premiums Miscellaneous Sale of Property $ 905.00 2,313.19 22,367.33 175.16 5,176.50 Total Treasurer -- Cash Collections 30,937.18 Journal Entries Interest on Investments and Deposits - Trust - Animal Control Fund Interest on Investments and Deposits - Trust - Other Funds Interest on Investments and Deposits - General Capital Fund Interest on Investments and Deposits - Federal and State Grant Fund Forfeited Tax Sale Premiums 20.63 672.40 85.14 245.77 21,682.28 Total Treasurer 53,643.40 Interest Earnings Miscellaneous - Tax Collector 774.80 220.00 Total Tax Collector -- Cash Collections 994.80 Total Non-Budget Revenues $ The accompanying Notes to Financial Statements are an integral part of this statement. -11- 54,638.20 19400 Exhibit A-3 BOROUGH OF PENNS GROVE Statement of Expenditures -- Regulatory Basis For the Year Ended December 31, 2010 Appropriations Budget After Budget Modification OPERATIONS -- WITHIN "CAPS" General Government Functions Mayor and Council: Salaries and Wages Other Expenses Municipal Clerk: Salaries and Wages Other Expenses Financial Administration: Salaries and Wages Other Expenses Audit Services: Other Expenses Tax Assessment Administration: Salaries and Wages Other Expenses Revenue Administration: Other Expenses Liquidation of Tax Title Liens and Foreclosed Property: Other Expenses Legal Services and Costs: Other Expenses Economic Development Agencies: Salaries and Wages Other Expenses Engineering Services and Costs: Other Expenses Land Use Administration Planning Board: Salaries and Wages Other Expenses Insurance General Liability Workers Compensation Employee Group Health Unemployment Insurance Accumulated Leave Compensation Other Expenses $ 27,060.00 2,000.00 $ 25,060.00 1,000.00 Expended Paid or Charged $ 24,961.74 366.00 Encumbered Reserved $ $ 100.00 98.26 534.00 80,000.00 24,650.00 78,080.00 24,650.00 71,861.26 24,310.03 205.00 6,218.74 134.97 110,900.00 15,000.00 110,900.00 15,000.00 105,131.36 10,360.55 921.52 5,768.64 3,717.93 42,000.00 42,000.00 42,000.00 15,029.00 2,175.00 15,029.00 2,695.00 14,590.32 2,031.62 504.00 438.68 159.38 6,375.00 7,775.00 6,482.81 7,000.00 1,000.00 93,000.00 123,000.00 121,600.61 500.00 22,325.00 500.00 34,325.00 19,825.00 11,270.00 500.00 3,230.00 40,500.00 38,500.00 9,788.88 26,700.00 2,011.12 5,465.00 9,000.00 5,465.00 9,000.00 5,463.60 1,525.00 1.40 7,475.00 142,494.00 236,303.00 957,263.00 8,300.00 142,494.00 236,303.00 957,263.00 8,300.00 142,494.00 231,803.00 956,678.72 7,178.98 4,500.00 584.28 1,121.02 4,000.00 4,000.00 4,000.00 Unexpended Balance Canceled 1,292.19 1,000.00 1,399.39 (Continued) -12- 19400 Exhibit A-3 BOROUGH OF PENNS GROVE Statement of Expenditures -- Regulatory Basis For the Year Ended December 31, 2010 Appropriations Budget After Budget Modification Public Safety Functions Fire: Fire Hydrant Service Other Expenses Police: Salaries and Wages Other Expenses Aid to Ambulance: Other Expenses Aid to YMCA: Other Expenses Office of Emergency Management: Other Expenses Municipal Prosecutor: Salaries and Wages Municipal Court Municipal Court: Salaries and Wages Other Expenses Public Defender: Salaries and Wages Public Works Functions Street and Road Maintenance: Salaries and Wages Other Expenses Public Buildings and Grounds: Salaries and Wages Other Expenses Shade Tree Commission: Other Expenses Solid Waste Collection: Salaries and Wages Other Expenses Demolition: Other Expenses Vehicle Maintenance: Other Expenses $ 29,275.00 28,875.00 $ 29,775.00 26,875.00 Expended Paid or Charged $ 29,275.00 14,751.88 Encumbered $ 441.34 146.16 Reserved $ Unexpended Balance Canceled 58.66 11,976.96 1,715,000.00 78,000.00 1,690,000.00 68,000.00 1,654,807.97 48,030.65 373.81 3,292.67 34,818.22 16,676.68 21,360.00 22,360.00 21,016.36 529.48 814.16 500.00 500.00 500.00 500.00 500.00 12,460.00 12,460.00 12,455.52 95,290.00 14,500.00 103,790.00 14,500.00 103,178.08 13,927.43 8,870.00 8,870.00 2,560.09 78,000.00 24,500.00 78,000.00 24,500.00 77,218.85 22,250.05 995.70 781.15 1,254.25 4,200.00 40,475.00 4,200.00 42,475.00 4,166.60 39,501.91 1,311.45 33.40 1,661.64 3,800.00 3,800.00 3,635.00 165.00 62,000.00 1,000.00 62,000.00 1,000.00 61,558.06 914.00 441.94 86.00 8,000.00 2,000.00 54,000.00 50,000.00 500.00 4.48 290.25 611.92 282.32 6,309.91 2,000.00 40,296.38 4,474.07 5,229.55 (Continued) -13- 19400 Exhibit A-3 BOROUGH OF PENNS GROVE Statement of Expenditures -- Regulatory Basis For the Year Ended December 31, 2010 Appropriations Budget After Budget Modification Health and Human Services Board of Health: Salaries and Wages Other Expenses Safety Coordinator: Salaries and Wages Other Expenses Animal Control: Other Expenses Senior Citizen Transportation: Other Expenses $ 500.00 1,825.00 $ 500.00 1,825.00 Expended Paid or Charged $ Encumbered 463.67 133.16 Reserved $ Unexpended Balance Canceled 36.33 1,691.84 620.00 1,000.00 620.00 1,000.00 999.90 620.00 0.10 20,200.00 20,200.00 18,270.00 1,930.00 700.00 700.00 6,000.00 6,000.00 4,419.62 1,580.38 60,000.00 60,000.00 58,246.27 1,753.73 148,500.00 35,000.00 3,000.00 46,000.00 2,300.00 148,500.00 41,000.00 3,000.00 44,000.00 2,300.00 128,286.28 39,051.43 1,099.67 34,315.33 1,230.17 23,270.00 4,500.00 23,270.00 4,500.00 21,406.68 1,801.78 37,814.00 5,125.00 37,814.00 5,125.00 32,769.45 1,344.62 220.00 5,044.55 3,560.38 Total Operations -- Within "CAPS" 4,528,298.00 4,528,298.00 4,296,335.34 68,525.92 163,436.74 - Detail: Salaries and Wages Other Expenses (Including Contingent) 2,276,978.00 2,251,320.00 2,256,558.00 2,271,740.00 2,192,593.25 2,103,742.09 373.81 68,152.11 63,590.94 99,845.80 - Recreation and Education Recreation Services and Programs: Other Expenses Landfill/Solid Waste Disposal Costs Sanitary Landfill: Other Expenses Utility Expenses and Bulk Purchases Electricity and Natural Gas Telecommunications Water Petroleum Products Sewage Processing & Disposal Code Enforcement and Administration Construction Officials: Salaries and Wages Other Expenses Other Code Enforcement Functions: Salaries and Wages Other Expenses 700.00 $ 7,341.96 1,749.54 7,658.97 12,871.76 199.03 1,900.33 2,025.70 1,069.83 1,863.32 2,698.22 (Continued) -14- 19400 Exhibit A-3 BOROUGH OF PENNS GROVE Statement of Expenditures -- Regulatory Basis For the Year Ended December 31, 2010 Appropriations Budget After Budget Modification Expended Paid or Charged Encumbered Reserved Unexpended Balance Canceled DEFERRED CHARGES AND STATUTORY EXPENDITURES -- WITHIN "CAPS" Statutory Expenditures Contribution to: Social Security System (O.A.S.I.) Public Employees' Retirement System Police and Firemen's Retirement System of NJ Total Deferred Charges and Statutory Expenditures -- Municipal -- Within "CAPS" Total General Appropriations for Municipal Purposes Within -- "CAPS" OPERATIONS -- EXCLUDED FROM "CAPS" Employee Group Health Contribution to: Public Employees Retirement System Police and Firemens Retirement System Aid to Library (N.J.S.A. 40:54-35) LOSAP Total Other Operations -- Excluded from "CAPS" Interlocal Municipal Service Agreements Revenue Administration (Tax Collection) Other Expenses Public Work Function: Other Costs Other Expenses Total Interlocal Municipal Service Agreements Public and Private Programs Offset by Revenues NJ Senior Citizen and Disabled Resident Transportation Act Recycling Tonnage Grant Body Armor Replacement Municipal Alliance on Alcoholism and Drug Abuse Click it or Ticket 2010 Over the Limit Under Arrest Alcohol Rehab & Education Fund Clean Communities Total Public and Private Programs Offset by Revenues $ 84,315.00 41,854.22 134,560.87 $ 84,315.00 41,854.22 134,560.87 $ 78,098.44 41,854.22 134,560.87 $ - 6,216.56 260,730.09 260,730.09 254,513.53 4,789,028.09 4,789,028.09 4,550,848.87 25,843.00 25,843.00 17,518.05 33,782.47 144,868.13 6,268.00 5,400.00 33,782.47 144,868.13 6,268.00 5,400.00 33,782.47 144,868.13 6,268.00 216,161.60 216,161.60 202,436.65 51,491.50 51,491.50 51,491.00 0.50 271,480.00 271,480.00 271,479.50 0.50 322,971.50 322,971.50 322,970.50 52,712.34 4,979.64 866.27 1,718.21 4,000.00 4,400.00 100.55 8,074.29 79,295.32 4,979.64 866.27 1,718.21 4,000.00 4,400.00 100.55 8,074.29 79,295.32 4,979.64 866.27 1,718.21 4,000.00 4,400.00 100.55 8,074.29 76,851.30 103,434.28 103,434.28 $ 68,525.92 6,216.56 - 169,653.30 - 8,324.95 5,400.00 - - - 13,724.95 1.00 - - - (Continued) -15- 19400 Exhibit A-3 BOROUGH OF PENNS GROVE Statement of Expenditures -- Regulatory Basis For the Year Ended December 31, 2010 Appropriations Budget After Budget Modification Total Operations -- Excluded from "CAPS" $ Salaries and Wages Other Expenses 615,984.40 $ 642,567.38 Expended Paid or Charged $ Encumbered 628,841.43 - 615,984.40 642,567.38 628,841.43 10,000.00 150,761.00 400,000.00 10,000.00 150,761.00 400,000.00 10,000.00 150,761.00 400,000.00 560,761.00 560,761.00 560,761.00 67,000.00 18,564.29 42,422.00 67,000.00 18,564.29 42,422.00 67,000.00 18,564.20 42,420.45 127,986.29 127,986.29 127,984.65 42,000.00 42,000.00 42,000.00 42,000.00 42,000.00 42,000.00 17,427.00 17,427.00 Total General Appropriations for Municipal Purposes Excluded from "CAPS" 1,364,158.69 1,390,741.67 1,359,587.08 Subtotal General Appropriations Reserve for Uncollected Taxes 6,153,186.78 615,552.31 6,179,769.76 615,552.31 5,910,435.95 615,552.31 $ 68,525.92 6,768,739.09 $ 6,795,322.07 $ 6,525,988.26 $ 68,525.92 CAPITAL IMPROVEMENTS -- EXCLUDED FROM "CAPS" Capital Improvement Fund NJ Transportation Trust Fund - Reconstruction of Barber Avenue Small Cities CDBG Grant - Installation of Wind Turbine at Sewerage Auth. Total Capital Improvements -- Excluded from "CAPS" MUNICIPAL DEBT SERVICE -- EXCLUDED FROM "CAPS" Payment of Bond Anticipation Notes and Capital Notes Interest on Notes Green Trust Loan Program - Loan Repayments for Principle & Interest Total Municipal Debt Service -- Excluded from "CAPS" DEFERRED CHARGES -- EXCLUDED FROM "CAPS" Special Emergency Authorizations - 5 Years (N.J.S.40A:4-55) Total Deferred Charges -- Excluded from "CAPS" Transferred to Board of Education for Use of Local Schools Total $ Budget Appropriation by 40A:4-87 Reserve for Federal and State Grant Fund--Appropriated Reserve for Uncollected Taxes Cash Disbursed $ The accompanying Notes to Financial Statements are an integral part of this statement. -16- $ - 13,725.95 - 13,725.95 - - - $ - - - - 0.09 1.55 1.64 17,427.00 $ 6,768,739.09 26,582.98 $ 6,795,322.07 Reserved Unexpended Balance Canceled 654,195.28 615,552.31 5,256,240.67 $ 6,525,988.26 - $ 13,725.95 17,428.64 183,379.25 17,428.64 183,379.25 $ 17,428.64 19400 Exhibit B BOROUGH OF PENNS GROVE TRUST FUNDS Statements of Assets, Liabilities and Reserves -- Regulatory Basis As of December 31, 2010 and 2009 Ref. 2010 2009 ASSETS: Animal Control Fund: Cash SB-1 Other Funds: Cash Due from Current Fund SB-1 SB-5 $ Total Other Funds 5,490.80 $ 5,206.68 221,863.46 - 240,908.20 1,850.33 221,863.46 242,758.53 $ 227,354.26 $ 247,965.21 $ 313.35 63.60 5,113.85 $ 292.72 32.40 4,881.56 LIABILITIES AND RESERVES: Animal Control Fund: Due to Current Fund Due to State of New Jersey Board of Health Reserve for Dog Fund Expenditures SB-3 SB-4 SB-2 Total Animal Control Fund 5,490.80 Other Funds: Due to Current Fund Reserve for: Dedicated Uniform Fire Fees Forfeiture Builder Deposits Compensated Balances Payroll Public Defender Fees POAA Outside Employment of Officers Tax Title Lien Redemptions SB-5 14,257.52 SB-6 SB-6 SB-6 SB-6 SB-6 SB-6 SB-6 SB-6 SB-6 2,625.00 6.73 46,147.91 30,299.10 20,912.37 0.00 372.00 3.92 107,238.91 140,545.12 221,863.46 242,758.53 Total Other Funds $ 227,354.26 The accompanying Notes to Financial Statements are an integral part of this statement. -17- 5,206.68 2,625.00 6.70 40,293.15 33,931.10 22,549.27 2,480.19 328.00 $ 247,965.21 19400 Exhibit C BOROUGH OF PENNS GROVE GENERAL CAPITAL FUND Statements of Assets, Liabilities and Reserves -- Regulatory Basis As of December 31, 2010 and 2009 ASSETS: Ref. Cash Due from Current Fund Due from Federal and State Grant Fund Deferred Charges to Future Taxation: Funded Unfunded SC-1 SC-7 C 2010 $ SC-4 SC-5 27,727.33 56,292.57 40,000.00 2009 $ 576,836.79 852,724.92 37,930.43 36,377.71 40,000.00 607,263.36 796,745.00 $ 1,553,581.61 $ 1,518,316.50 $ 64,387.83 576,836.79 633,500.00 $ 48,413.74 607,263.36 700,800.00 LIABILITIES AND RESERVES Capital Improvement Fund Green Trust Loan Payable Bond Anticipation Notes Improvement Authorizations: Funded Unfunded Reserve for Heating System Reserve for Riverwalk Project Reserve for Payment of Notes SC-6 SC-9 SC-10 SC-8 SC-8 C SC-3 C 35,500.00 199,500.00 25,000.00 64.80 18,792.19 $ 1,553,581.61 The accompanying Notes to Financial Statements are an integral part of this statement. -18- 41,474.09 76,520.08 25,000.00 53.04 18,792.19 $ 1,518,316.50 19400 BOROUGH OF PENNS GROVE Notes to Financial Statements For the Year Ended December 31, 2010 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Financial Reporting Entity - The Borough of Penns Grove is located in southwest New Jersey in the County of Salem along the Delaware River approximately twenty miles southeast of the City of Philadelphia. The population according to the 2000 census is 4,886 and estimated to be 4,676 for 2009. The Borough has a Mayor-Council form of government in accordance with N.J.S.A. 40A:60-1. The Mayor is separately elected every four years. Executive and administrative responsibility rests with the Mayor, who is assisted by the Borough Clerk. Council members are elected to three-year terms. Component Units - The financial statements of the component units of the Borough of Penns Grove are not presented in accordance with Governmental Accounting Standards Board Statement No. 14. If the provisions of GASBS No. 14 had been complied with, the financial statements of the following component units would have been either blended or discretely presented with the financial statements of the Borough, the primary government: Penns Grove Sewerage Authority 81 Beach Avenue Penns Grove, New Jersey 08069 Penns Grove Redevelopment Agency 1 State Street Penns Grove, New Jersey 08069 Annual financial reports may be inspected directly at the offices of these component units during regular business hours. Basis of Accounting, Measurement Focus and Basis of Presentation - The financial statements of the Borough of Penns Grove contain all funds and account groups in accordance with the "Requirements of Audit" as promulgated by the State of New Jersey, Department of Community Affairs, Division of Local Government Services. The principles and practices established by the Requirements of Audit are designed primarily for determining compliance with legal provisions and budgetary restrictions and as a means of reporting on the stewardship of public officials with respect to public funds. Generally, the financial statements are presented using the flow of current financial resources measurement focus and modified accrual basis of accounting with minor exceptions as mandated by these "Requirements". In addition, the prescribed accounting principles previously referred to differ in certain respects from accounting principles generally accepted in the United States of America applicable to local government units. The more significant differences are explained in this Note. In accordance with the "Requirements", the Borough of Penns Grove accounts for its financial transactions through the use of separate funds which are described as follows: Current Fund - The Current Fund accounts for resources and expenditures for governmental operations of a general nature, including Federal and State grant funds. Trust Funds - The various Trust Funds account for receipts, custodianship and disbursement of funds in accordance with the purpose for which each reserve was created. General Capital Fund - The General Capital Fund accounts for receipt and disbursement of funds for the acquisition of general capital facilities, other than those acquired in the Current Fund. -19- 19400 Notes to Financial Statements (Cont'd) Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D) Budgets and Budgetary Accounting - The Borough of Penns Grove must adopt an annual budget for its current fund in accordance with N.J.S.A. 40A:4 et seq. N.J.S.A. 40A:4-5 requires the governing body to introduce and approve the annual municipal budget no later than February 10 of each year. At introduction, the governing body shall fix the time and place for a public hearing on the budget and must advertise the time and place at least ten days prior to the hearing in a newspaper published and circulating in the municipality. The public hearing must not be held less than twenty-eight days after the date the budget was introduced. After the hearing has been held, the governing body may, by majority vote, adopt the budget or may amend the budget in accordance with N.J.S.A. 40A:4-9. Amendments to adopted budgets, if any, are detailed in the statements of revenues and expenditures. An extension of the statutory dates for introduction, approval and adoption of the municipal budget may be granted by the Director of the Division of Local Government Services, with the permission of the Local Finance Board. Budgets are adopted on the same basis of accounting utilized for the preparation of the Borough's financial statements. Cash, Cash Equivalents and Investments - Cash and cash equivalents include petty cash, change funds and cash on deposit with public depositories. All certificates of deposit are recorded as cash regardless of the date of maturity. Investments are stated at cost. Consequently, unrealized gain or loss on investments has not been recorded in accordance with Governmental Accounting Standards Board Statement No. 31. New Jersey municipal units are required by N.J.S.A. 40A:5-14 to deposit public funds in a bank or trust company having its place of business in the State of New Jersey and organized under the laws of the United States or of the State of New Jersey or in the New Jersey Cash Management Fund. N.J.S.A. 40A:5-15.1 provides a list of investments which may be purchased by New Jersey municipal units. In addition, other State statutes permit investments in obligations issued by local authorities and other state agencies. N.J.S.A. 17:9-41 et seq. establishes the requirements for the security of deposits of governmental units. The statute requires that no governmental unit shall deposit public funds in a public depository unless such funds are secured in accordance with the Governmental Unit Deposit Protection Act (“GUDPA”), a multiple financial institutional collateral pool, which was enacted in 1970 to protect governmental units from a loss of funds on deposit with a failed banking institution in New Jersey. Public depositories include State or federally chartered banks, savings banks or associations located in or having a branch office in the State of New Jersey, the deposits of which are federally insured. All public depositories must pledge collateral, having a market value at least equal to five percent of the average daily balance of collected public funds, to secure the deposits of Governmental Units. If a public depository fails, the collateral it has pledged, plus the collateral of all other public depositories, is available to pay the amount of their deposits to the Governmental Units. The cash management plan adopted by the Borough of Penns Grove requires it to deposit funds in public depositories protected from loss under the provisions of the Act. Interfunds - Interfund receivables and payables that arise from transactions between funds are recorded by all funds affected by such transactions in the period in which the transaction is executed. Interfund receivables in the Current Fund are recorded with offsetting reserves which are created by charges to operations. Income is recognized in the year the receivables are liquidated. Interfund receivables in the other funds are not offset by reserves. -20- 19400 Notes to Financial Statements (Cont'd) Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D) Inventories of Supplies - The costs of inventories of supplies for all funds are recorded as expenditures at the time individual items are purchased. The costs of inventories are not included on the various statements of assets, liabilities, reserves and fund balance. General Fixed Assets - Accounting for Governmental Fixed Assets, as required by N.J.A.C. 5:30-5.6, differs in certain respects from accounting principles generally accepted in the United States of America. In accordance with the regulations, all local units, including municipalities, must maintain a general fixed assets reporting system that establishes and maintains a physical inventory of nonexpendable, tangible property as defined and limited by the U.S. Office of Management and Budget Circular A-87 (Attachment B, Section 19), except that the useful life of such property is at least five years. The Borough has adopted a capitalization threshold of $5,000, the maximum amount allowed by the Circular. Generally, assets are valued at historical cost; however, assets acquired prior to December 31, 1985 are valued at actual historical cost or estimated historical cost. No depreciation of general fixed assets is recorded. Donated general fixed assets are recorded at their estimated fair market value on the acquisition date. Interest costs relative to the acquisition of general fixed assets are recorded as expenditures when paid. Public domain ("infrastructure") general fixed assets consisting of certain improvements such as roads, bridges, curbs and gutters, streets and sidewalks and drainage systems are not capitalized. Expenditures for construction in progress are recorded in the Capital Funds until such time as the construction is completed and put into operation. The Borough is required to maintain a subsidiary ledger detailing fixed assets records to control additions, retirements and transfers of fixed assets. In addition, a Statement of General Fixed Assets, reflecting the activity for the year, must be included in the Borough’s basic financial statements. The regulations require that general fixed assets, whether constructed or acquired through purchase, grant or gift be included in the aforementioned inventory. In addition, property management standards must be maintained that includes accurate records indicating asset description, source, ownership, acquisition cost and date, the percentage of Federal participation (if any), and the location, use, and condition of the asset, Periodically, physical inventories must be taken and reconciled with these records. Lastly, all fixed assets must be adequately controlled to safeguard against loss, damage or theft. Foreclosed Property - Foreclosed property is recorded in the Current Fund at the assessed valuation when such property was acquired and is fully reserved. Ordinarily it is the intention of the municipality to resell foreclosed property in order to recover all or a portion of the delinquent taxes or assessments and to return the property to a taxpaying basis. For this reason the value of foreclosed property has not been included in the General Fixed Assets Account Group. If such property is converted to a municipal use, it will be recorded in the General Fixed Assets Account Group. Deferred Charges - The recognition of certain expenditures is deferred to future periods. These expenditures, or deferred charges, are generally overexpenditures of legally adopted budget appropriations or emergency appropriations made in accordance with N.J.S.A. 40A:4-46 et seq. Deferred charges are subsequently raised as items of appropriation in budgets of succeeding years. Liens Sold for Other Governmental Units - Liens sold on behalf of other governmental units are not recorded on the records of the tax collector until such liens are collected. Upon their collection, such liens are recorded as a liability due to the governmental unit net of the costs of the initial sale. The related costs of sale are recognized as revenue when received. Fund Balance - Fund Balance included in the current fund represent amounts available for anticipation as revenue in future years budgets, with certain restrictions. -21- 19400 Notes to Financial Statements (Cont'd) Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D) Revenues - Revenues are recorded when received in cash except for certain amounts which are due from other governmental units. Revenue from Federal and State grants are realized when anticipated as such in the Borough's budget. Receivables for property taxes are recorded with offsetting reserves on the statement of assets, liabilities, reserves and fund balance of the Borough's Current Fund; accordingly, such amounts are not recorded as revenue until collected. Other amounts that are due the Borough which are susceptible to accrual are also recorded as receivables with offsetting reserves and recorded as revenue when received. Property Tax Revenues - Property tax revenues are collected in quarterly installments due February 1, May 1, August 1, and November 1. The amount of tax levied includes not only the amount required in support of the Borough's annual budget, but also the amounts required in support of the budgets of the County of Salem and the Penns Grove Carney’s Point Regional School District. Unpaid property taxes are subject to tax sale in accordance with the statutes. School Taxes - The municipality is responsible for levying, collecting and remitting school taxes for the Penns Grove Carney’s Point Regional School District. Operations is charged for the full amount required to be raised from taxation to operate the school district for the period from January 1 to December 31. County Taxes - The municipality is responsible for levying, collecting and remitting county taxes for the County of Salem. Operations is charged for the amount due the County for the year, based upon the ratables required to be certified to the County Board of Taxation by January 10 of the current year. In addition, operations is charged for the County share of Added and Omitted Taxes certified to the County Board of Taxation by October 10 of the current year and due to be paid to the County by February 15 of the following year. Reserve for Uncollected Taxes - The inclusion of the "Reserve for Uncollected Taxes" appropriation in the Borough's annual budget protects the Borough from taxes not paid currently. The Reserve, the minimum amount of which is determined on the percentage of collections experienced in the immediate preceding year, with certain exceptions, is required to provide assurance that cash collected in the current year will provide sufficient cash flow to meet expected obligations. Expenditures - Expenditures are recorded on the "budgetary" basis of accounting. Generally, expenditures are recorded when paid. However, for charges to amounts appropriated for “other expenses”, an amount is encumbered through the issuance of a numerically controlled purchase order or when a contract is executed in accordance with N.J.A.C. 5:30-5.2. When encumbered charges are paid, the amount encumbered is simultaneously liquidated in its original amount. Encumbrances are offset by an account entitled reserve for encumbrances. The reserve is classified as a cash liability under New Jersey municipal accounting. At December 31, this reserve represents the portion of appropriation reserves that has been encumbered and is subject to the same statutory provisions as appropriation reserves. Appropriations for principal payments on outstanding general capital bonds and notes are provided on the cash basis; interest on general capital indebtedness is on the cash basis. Appropriation Reserves - Appropriation reserves covering unexpended appropriation balances are automatically created at year-end and recorded as liabilities, except for amounts which may be canceled by the governing body. Appropriation reserves are available, until lapsed at the close of the succeeding year, to meet specific claims, commitments or contracts incurred during the preceding fiscal year. Lapsed appropriation reserves are recorded as income. -22- 19400 Notes to Financial Statements (Cont'd) Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D) Long-Term Debt - Long-Term Debt, relative to the acquisition of capital assets, is recorded as a liability in the General Capital Fund. Where an improvement is a “local Improvement”, i.e. assessable upon completion, long-term debt associated with that portion of the cost of the improvement to be funded by assessments is transferred to the Trust Fund upon the confirmation of the assessments or when the improvement is fully and permanently funded. Compensated Absences and Postemployment Benefits - Compensated absences for vacation, sick leave and other compensated absences are recorded and provided for in the annual budget in the year in which they are paid, on a pay-as-you-go basis. Likewise, no accrual is made for postemployment benefits, if any, which are also funded on a pay-as-you-go basis. Note 2: CASH AND CASH EQUIVALENTS Custodial Credit Risk Related to Deposits - Custodial credit risk is the risk that, in the event of a bank failure, the Borough’s deposits might not be recovered. Although the Borough does not have a formal policy regarding custodial credit risk, N.J.S.A. 17:9-41 et seq. requires that governmental units shall deposit public funds in public depositories protected from loss under the provisions of the Governmental Unit Deposit Protection Act (GUDPA). Under the Act, the first $250,000 of governmental deposits in each insured depository is protected by the Federal Deposit Insurance Corporation (FDIC). Public funds owned by the Borough in excess of FDIC insured amounts are protected by GUDPA. However, GUDPA does not protect intermingled trust funds such as salary withholdings or funds that may pass to the Borough relative to the happening of a future condition. Such funds are shown as Uninsured and Uncollateralized in the schedule below. As of December 31, 2010, the Borough’s bank balances of $2,180,505.18 were completely insured and/or collateralized. Note 3: PROPERTY TAXES The following is a five-year comparison of certain statistical information relative to property taxes and property tax collections for the current and previous four years. Comparative Schedule of Tax Rates 2010 Tax Rate Apportionment of Tax Rate: Municipal County County Open Space Preservation Local School 2009R 2008 2007 2006 $3.363 $3.218 $6.190 $5.716 $5.390 $1.340 0.854 0.020 1.149 $1.153 0.888 0.021 1.156 $2.122 1.692 0.038 2.338 $1.802 1.521 0.034 2.359 $1.622 1.440 0.030 2.298 Assessed Valuation 2010 2009R 2008 2007 2006 $179,563,917.00 179,351,597.00 91,779,679.00 91,510,515.00 89,939,456.00 R = Revaluation -23- 19400 Notes to Financial Statements (Cont'd) Note 3: PROPERTY TAXES (CONT'D) Comparison of Tax Levies and Collections Year 2010 2009 2008 2007 2006 Tax Levy Percentage Of Collections Collections $6,038,735.18 5,783,915.08 5,781,576.02 5,250,610.10 4,923,239.79 $5,587,124.75 5,330,124.01 5,273,997.46 4,843,935.48 4,537,913.54 92.52% 92.15% 91.22% 92.25% 92.17% Delinquent Taxes and Tax Title Liens Year 2010 2009 2008 2007 2006 Tax Title Liens $116,579.08 102,414.66 27,923.85 147,784.98 124,763.32 Delinquent Taxes Total Delinquent $408,705.24 422,296.32 495,757.85 396,302.65 374,612.68 $525,284.32 524,710.98 523,681.70 544,087.63 499,376.00 Percentage of Tax Levy 8.70% 9.07% 9.06% 10.36% 10.14% The following comparison is made of the number of tax title liens receivable on December 31 of the last five years: Year 2010 2009 2008 2007 2006 Number 49 47 14 183 182 Note 4: PROPERTY ACQUIRED BY TAX TITLE LIEN LIQUIDATION The value of property acquired by liquidation of tax title liens on December 31, on the basis of the last assessed valuation of such properties, for the current and previous four years was as follows: Year 2010 2009 2008 2007 2006 Amount $263,600.00 289,200.00 289,200.00 ----- Prior to 01/01/08, all available foreclosed property was transferred to the Penns Grove Redevelopment Agency. -24- 19400 Notes to Financial Statements (Cont'd) Note 5: FUND BALANCES APPROPRIATED The following schedule details the amount of fund balances available at the end of the current year and four previous years and the amounts utilized in the subsequent year's budgets. Utilized In Budget of Succeeding Year Balance Dec. 31 Year Current Fund 2010 2009 2008 2007 2006 $638,948.84 610,138.24 521,962.03 428,635.13 710,033.43 $500,760.00 500,760.00 292,000.00 415,000.00 620,000.00 Percentage of Fund Balance Used 78.37% 82.07% 55.94% 96.82% 87.32% Note 6: INTERFUND RECEIVABLES AND PAYABLES The following interfund balances were recorded on the various statements of assets, liabilities, reserves and fund balance as of December 31, 2010: Interfunds Receivable Fund Current Fund Federal and State Grant Fund Trust – Animal Control Fund Trust -- Other Funds General Capital Fund $14,570.87 4,701.56 Interfunds Payable $60,994.13 40,000.00 313.35 14,257.52 96,292.57 $115,565.00 $115,565.00 Note 7: PENSION PLANS The Borough of Penns Grove contributes to two cost-sharing multiple-employer defined benefit pension plans, the Public Employees' Retirement System (PERS) and the Police and Firemen's Retirement System (PFRS), which are administered by the New Jersey Division of Pensions and Benefits. In addition, certain future Borough employees will participate in the Defined Contribution Retirement Program (DCRP), which is a defined contribution pension plan and is also administered by the New Jersey Division of Pensions and Benefits. Each plan has a Board of Trustees that is primarily responsible for its administration. The Division issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to: State of New Jersey Division of Pensions and Benefits P.O. Box 295 Trenton, New Jersey 08625-0295 Public Employees’ Retirement System – The PERS was established in 1955. The PERS provides retirement, death, and disability, and medical benefits to qualified members. Vesting and benefit provisions are established by N.J.S.A. 43:15A and 43:3B. -25- 19400 Notes to Financial Statements (Cont'd) Note 7: PENSION PLANS (CONT’D) The contribution requirements of plan members are determined by State statute. In accordance with Chapter 62, P.L. 1994, plan members enrolled in the Public Employees' Retirement System were required to contribute 5% of their annual covered salary. Effective July 1, 2008, however, in accordance with Chapter 92, P.L. 2007 and Chapter 103, P.L. 2007, plan members are required to contribute 5.5% of their annual covered salary. For employees enrolled in the retirement system prior to July 1, 2008, the increase is effective with the payroll period that begins immediately after July 1, 2008. The State Treasurer has the right under the current law to make temporary reductions in member rates based on the existence of surplus pension assets in the retirement system; however, the statute also requires the return to the normal rate when such surplus pension assets no longer exist. The Borough is billed annually for it normal contribution plus any accrued liability. These contributions, equal to the required contributions, were as follows: Year Normal Contribution Accrued Liability 2010 2009 2008 $35,794.00 33,611.00 33,516.00 $34,924.00 30,657.00 25,829.00 Total Liability $70,718.00 64,268.00 59,345.00 Funded by State Pension Deferral ----$11,869.00 --$28,581.50 --- Paid by Borough $70,718.00 35,686.50 47,476.00 (1) Police and Firemen’s Retirement System – The PRFS was established in 1944. The PFRS provides retirement, death, and disability, and medical benefits to qualified members. Vesting and benefit provisions are established by N.J.S.A. 43:16A and 43:3B. The contribution requirements of plan members are determined by State statute. In accordance with Chapter 204, P.L. 1989, plan members enrolled in the Police and Firemen’s Retirement System are required to contribute 8.5% of their annual covered salary. The State Treasurer has the right under the current law to make temporary reductions in member rates based on the existence of surplus pension assets in the retirement system; however, statute also requires the return to the normal rate when such surplus pension assets no longer exist. The Borough is billed annually for its normal contribution plus any accrued liability. These contributions, equal to the required contributions, were as follows: Year 2010 2009 2008 Normal Contribution $168,801.00 151,885.00 140,046.00 Accrued Liability $110,628.00 98,256.00 82,757.00 Total Liability $279,429.00 250,141.00 222,803.00 Pension Deferral --$120,130.50 --- Paid by Borough $279,429.00 130,010.50 222,803.00 Pension Deferral – Public Law 2009, c.19 (S-21) was enacted on March 17, 2009 and allowed the Division of Pensions and Benefits to provide non-state government pension system employers the option of paying the full amount, or an amount that reflects a 50 percent reduction of the normal and accrued liability component of the PERS and PFRS obligations for payments due in the State fiscal year ending June 30, 2009. The payments were due on April 1, 2009 (with a grace period until April 30). The amount will be repaid starting in April of 2012 over a 15 year period. The amount will fluctuate based on pension system investment earnings on the deferred amount. The Borough applied for and received approval from the Local Finance Board to defer a portion of the 2009 liability due for both PERS and PFRS. -26- 19400 Notes to Financial Statements (Cont'd) Note 7: PENSION PLANS (CONT’D) Related Party Investments - The Division of Pensions and Benefits does not invest in securities issued by the Borough. ________________________ (1) Under the provisions of Chapter 108, P.L. 2003 the Borough’s share of the total normal contribution and accrued liability will increase approximately 20% per year until the Borough is paying 100% of the total normal contribution and accrued liability. Note 8: COMPENSATED ABSENCES Employees of the Borough are entitled to paid vacation and sick days based on job description, collective bargaining agreements and other factors. The Borough has established a Compensated Absences Trust Fund to set aside funds for future payments of compensated absences. At December 31, 2010 the balance of the fund was $30,299.10. It is estimated that, at December 31, 2010, accrued benefits for compensated absences are valued at $144,394.80. Note 9: DEFERRED COMPENSATION SALARY ACCOUNT The Borough offers its employees a Deferred Compensation Plan in accordance with Internal Revenue Code Section 457 which has been approved by the Director of the Division of Local Government Services. The Plan, available to all full time employees at their option, permits employees to defer a portion of their salary to future years. The deferred compensation is not available to participants until termination, retirement, death or unforeseeable emergency. Amounts deferred under Section 457 plans must be held in trust for the exclusive benefit of participating employees and not be accessible by the Borough or its creditors. Since the Borough does not have a fiduciary relationship with the Plan, the balances and activities of the Plan are not reported in the Borough’s financial statements. Note 10: LENGTH OF SERVICE AWARD PROGRAM The Borough’s Length of Service Awards Program (LOSAP) was created by a Borough Ordinance 9917 pursuant to Section 457 (e)(11)(13) of the Internal Service Code of 1986, as amended, except for provisions added by reason of the Length of Service Award Program as enacted into federal law in 1997. The voters of the Borough of Penns Grove approved the adoption of the LOSAP at the general election held on November 2, 1999, and the first year of eligibility for entrance into the LOSAP by qualified volunteers was calendar year 2000. The LOSAP provides tax deferred income benefits to active volunteer firefighters and emergency medical personnel. Amounts deferred under Section 457 plans must be held in trust for the exclusive benefit of participating employees and not be accessible by the Borough or its creditors. Since the Borough does not have a fiduciary relationship with the LOSAP, the balances and activities of the LOSAP are not reported in the Borough’s financial statements. -27- 19400 Notes to Financial Statements (Cont'd) Note 11: CAPITAL DEBT Summary of Debt Year 2010 Issued General: Bonds and Notes Year 2009 Year 2008 $1,210,336.79 $1,308,063.36 $1,366,390.40 Deductions Reserve to Pay Notes (18,792.19) (18,792.19) (18,792.19) Authorized but not Issued General: Bonds and Notes 219,224.92 95,945.00 96,045.00 $1,410,769.52 $1,385,216.17 $1,443,643.21 Net Debt Summary of Statutory Debt Condition - Annual Debt Statement The summarized statement of debt condition which follows is prepared in accordance with the required method of setting up the Annual Debt Statement and indicated a statutory net debt of .79%. Gross Debt Regional School District General Deductions Net Debt $ 1,654,084.62 1,429,561.71 $ 1,654,084.62 18,792.19 --$ 1,410,769.52 $ 3,083,646.33 $ 1,672,876.81 $ 1,410,769.52 Net Debt $ 1,410,769.52 divided by the Equalized Valuation Basis per N.J.S.A.40A:2-2 as amended, $178,615,802.00 equals 0.79%. Borrowing Power Under N.J.S.A.40A:2-6 As Amended 3 ½% of Equalized Valuation Basis (Municipal) Net Debt $ 6,251,553.07 1,410,769.52 Remaining Borrowing Power $ 4,840,783.55 Schedule of Annual Debt Service for Principal and Interest for Bonded Debt Issued and Outstanding Year 2011 2012 2013 2014 2015 2016-2020 2021-2025 2026-2030 Principal $31,038.14 31,662.00 32,298.40 32,947.60 33,609.85 166,109.49 170,509.41 78,661.90 Interest $11,382.32 10,758.45 10,122.05 9,472.85 8,810.61 33,888.45 17,384.14 2,310.66 -28- Total $42,420.46 42,420.45 42,420.45 42,420.45 42,420.46 199,997.94 187,893.55 80,972.56 19400 Notes to Financial Statements (Cont'd) Note 12: JOINT INSURANCE POOL The Borough of Penns Grove is a member of the Gloucester, Salem, Cumberland Counties Municipal Joint Insurance Fund. The Fund provides its members with the following coverage: Workers' Compensation and Employer's Liability Liability other than Motor Vehicles Property Damage other than Motor Vehicles Motor Vehicles Contributions to the Fund, including a reserve for contingencies, are payable in two installments and are based on actuarial assumptions determined by the Fund's actuary. The Commissioner of Insurance may order additional assessments to supplement the Fund's claim, loss retention or administrative accounts to assure the payment of the Fund's obligations. The Fund provides the Borough with the following coverage: Workers' Compensation and Employer's Liability General and Automobile Liability Public Officials Liability Casualty and Crime Coverage Property – Blanket Buildings and Grounds Contributions to the Fund, are payable in an annual premium and is based on actuarial assumptions determined by the Fund's actuary. The Borough's agreement with the pool provides that the pool will be self-sustaining through member premiums and will reinsure through commercial insurance for claims in excess of $500,000 for each insured event. The Fund publishes its own financial report, which can be obtained from: Gloucester, Salem, Cumberland Counties Municipal Insurance Fund P.O. Box 490 Marlton, New Jersey 08053 Note 13: DEFERRED CHARGES TO BE RAISED IN SUCCEEDING BUDGETS Certain expenditures are required to be deferred to budgets of succeeding years. At December 31, 2010, the following deferred charges are shown on the statement of assets, liabilities, reserves and fund balance of the following fund: Balance Dec. 31, 2010 Current Fund: Special Emergency Authorizations $ 126,000.00 2011 Budget Appropriation $ 42,000.00 The appropriations in the 2011 Budget as adopted are not less than that required by the statutes. -29- 19400 Notes to Financial Statements (Cont'd) Note 14: DEBT SERVICE AGREEMENT The Borough has entered into a debt service agreement with the Penns Grove Sewerage Authority. The Borough adopted Ordinance No. 07-11 in the amount of $300,000.00 to provide the Authority with additional funding to complete the rehabilitation project of the wastewater treatment plant. The Authority shall repay the Borough principal and interest that has accrued at a rate equal to the rate incurred by the Borough in connection with the borrowing of funds. The Sewerage Authority shall utilize the funds exclusively for the project and shall provide the Borough with written reports and records evidencing compliance with same. At December 31, 2010, the Borough had $195,000.00 in outstanding debt covered by this agreement. Note 15: OTHER POST EMPLOYMENT BENEFITS In addition to the pension benefits described in Note 7, the Borough currently pays a variety of insurance premiums for 15 retired employees. The Borough currently accounts for and finances such expenditures on a pay as you go basis. The expense for these benefits for the year ended December 31, 2010 was approximately $280,000.00. The calculation of Other Post Employment Benefits (OPEB) costs and liabilities generally requires a study of long-term projections of program participation and health care costs. The Borough has not engaged an actuary to perform this study as required by GASB 45. Note 16: LITIGATION The Borough is a defendant in several legal proceedings that are in various stages of litigation. It is believed that the outcome, or exposure to the Borough, from such litigation is either unknown or potential losses, if any, would not be material to the financial statements. -30- SUPPLEMENTAL EXHIBITS -31- SUPPLEMENTAL EXHIBITS CURRENT FUND -32- 19400 Exhibit SA-1 BOROUGH OF PENNS GROVE CURRENT FUND Statement of Current Cash For the Year Ended December 31, 2010 Federal and State Grant Fund Regular Fund Treasurer Balance December 31, 2009 Increased by Receipts: From Tax Collector Taxes Receivable Tax Title Liens Tax Overpayments Prepaid Taxes Senior Citizens' and Veterans' Deductions Miscellaneous Revenue Anticipated Miscellaneous Revenue Not Anticipated Due Federal & State Grant Fund - Collected for Due Trust -- Other Funds - Collector for Due General Capital Fund - Received from Due Current Fund Reserve for Program Income Loans Receivable - HUD Special Purpose Grant Contra Decreased by Disbursements: To Treasurer Appropriations Appropriation Reserves County Taxes Payable Local School Taxes Payable Tax Overpayments Due from Redevelopment Agency Reserve for Revaluation Due Federal & State Grant Fund - Disbursed for Appropriated Grants Reserve for Program Income Refund of Prior Year Revenue Contra $ $ Tax Collector 764,475.05 $ $ 220,123.01 6,347,566.00 $ 45,250.00 2,608,190.00 30,937.18 229,151.96 44.00 20,000.00 5,878,085.49 32,914.29 672.56 57,310.88 267,886.98 994.80 $ 245.77 16,389.54 9,390.64 139,279.00 9,420,418.14 6,237,865.00 26,025.95 10,184,893.19 6,595,561.89 246,148.96 6,347,566.00 5,256,240.67 191,201.93 1,567,632.30 1,807,756.12 5,846.14 5,000.00 10,000.00 113,873.82 1,149.62 50,000.00 9,242.83 139,279.00 9,106,072.81 Balance December 31, 2010 357,696.89 $ 1,078,820.38 -33- 6,347,566.00 $ 247,995.89 51,149.62 $ 194,999.34 19400 Exhibit SA-2 BOROUGH OF PENNS GROVE CURRENT FUND Statement of Taxes Receivable and Analysis of Property Tax Levy For the Year Ended December 31, 2010 Balance Dec. 31, 2009 Prior 2009 $ 2010 Levy 2009 2010 9,223.54 413,072.78 $ 422,296.32 2010 $ Collected 422,296.32 - - $ 6,038,735.18 $ 67,968.67 $ 6,038,735.18 $ 67,968.67 Analysis of 2010 Property Tax Levy Tax Yield: General Purpose Added / Omitted Taxes 382.75 402,007.62 - 5,475,695.12 5,878,085.49 $ 6,038,735.18 - $ $ - 2,062,622.54 $ 1,531,878.13 35,754.17 1,567,632.30 Local Tax for Municipal Purposes Add: Additional Tax Levied Transferred to Liens Balance Dec. 31, 2010 $ 402,390.37 $ Adjustments and Canceled $ $ 6,038,735.18 Tax Levy: Regional School Tax County Taxes: County Tax County Open Space Tax Due County for Added and Omitted Taxes Due from State of New Jersey Overpayments Applied 2,407,781.00 699.34 2,408,480.34 $ 6,038,735.18 -34- - 10,392.60 8,840.79 0.00 672.56 10,392.60 8,840.79 35,338.18 399,864.45 672.56 $ 43,460.96 $ 16,407.80 $ 43,460.96 $ 17,080.36 $ $ 45,730.78 $ 408,705.24 19400 Exhibit SA-3 BOROUGH OF PENNS GROVE CURRENT FUND Statement of Tax Title Liens For the Year Ended December 31, 2010 Balance December 31, 2009 $ Increased by: Interest and Costs Transfers from Taxes Receivable $ 102,414.66 1,347.93 45,730.78 47,078.71 149,493.37 Decreased by: Collections 32,914.29 Balance December 31, 2010 $ -35- 116,579.08 19400 Exhibit SA-4 BOROUGH OF PENNS GROVE CURRENT FUND Statement of Due from State of New Jersey Senior Citizens' and Veterans' Deductions For the Year Ended December 31, 2010 Balance December 31, 2009 $ Increased by: 2010 Levy -- Deductions per Tax Billing 2010 Senior Citizens' and Veterans' Deductions Granted by Tax Collector $ 3,094.92 47,000.00 125.00 $ 2010 Senior Citizens' and Veteran's Deductions Disallowed by Tax Collector 47,125.00 (3,664.04) 43,460.96 46,555.88 Decreased by: Cash Received Prior Year Senior Citizens' and Veterans' Deductions Disallowed by Tax Collector 45,250.00 none 45,250.00 Balance December 31, 2010 $ -36- 1,305.88 19400 Exhibit SA-5 BOROUGH OF PENNS GROVE CURRENT FUND Statement of Revenue Accounts Receivable For the Year Ended December 31, 2010 Balance Dec. 31, 2009 Licenses: Alcoholic Beverages Other Fees and Permits Fines and Costs - Municipal Court Interest and Costs on Taxes Payment in Lieu of Taxes: Penns Grove Gardens Penn Village Consolidated Municipal Property Tax Relief Aid Energy Receipts Tax Transitional Aid Uniform Construction Code Fees Public and Private Revenues Offset N.J. Transportation Trust Fund Authority Act NJ Senior Citizen and Disabled Resident Transportation Act Recycling Tonnage Grant Body Armor Replacement Over the Limit Under Arrest Click it or Ticket 2010 Alcohol Rehab & Education Fund Clean Communities Small Cities Grant Penns Grove Sewerage Authority Contribution Accrued $ $ 4,176.17 8,995.39 1,157.75 $ 14,329.31 Treasurer Public and Private Revenues Offset Tax Collector 5,757.76 104,314.00 86,322.80 122,239.31 73,386.98 Collected/Applied $ 5,757.76 104,314.00 84,982.53 124,388.32 73,386.98 152,000.00 42,500.00 526,736.00 718,118.00 1,000,000.00 16,555.94 152,000.00 42,500.00 526,736.00 718,118.00 1,000,000.00 6,443.39 150,761.00 79,295.32 4,979.64 866.27 4,400.00 4,000.00 100.55 8,074.29 400,000.00 37,450.00 150,761.00 79,295.32 4,979.64 866.27 4,400.00 4,000.00 100.55 8,074.29 400,000.00 37,450.00 $ 3,537,857.86 $ 3,528,554.05 $ 2,608,190.00 652,477.07 267,886.98 $ 3,528,554.05 -37- Balance Dec. 31, 2010 $ 5,516.44 6,846.38 11,270.30 $ 23,633.12 19400 Exhibit SA-6 BOROUGH OF PENNS GROVE CURRENT FUND Statement of Appropriation Reserves For the Year Ended December 31, 2010 Balance After Modification Balance December 31, 2009 Encumbered Reserved Paid or Charged Lapsed to Fund Balance OPERATIONS -- WITHIN "CAPS" General Government Functions Mayor and Council: Salaries and Wages Other Expenses Municipal Clerk: Salaries and Wages Other Expenses $ Financial Administration: Salaries and Wages Other Expenses Revenue Administration Other Expenses Tax Assessment Administration Salaries and Wages Other Expenses Legal Services and Costs Other Expenses Engineering Services and Costs Other Expenses Economic Development Agencies Other Expenses Audit Services: Other Expenses Liquidation of Tax Title Liens and Foreclosed Property Other Expenses Land Use Administration Planning Board: Salaries and Wages Other Expenses Public Safety Functions Fire: Fire Hydrant Service Miscellaneous Other Expenses Police: Salaries and Wages Other Expenses Aid to Ambulance: Other Expenses Office of Emergency Management Other Expenses Municipal Prosecutor: Salaries and Wages Municipal Court Municipal Court: Salaries and Wages Other Expenses Public Defender: Salaries and Wages Insurance Workers Compensation Employee Group Health Unemployment Insurance Public Works Functions Street and Road Maintenance Salaries and Wages Other Expenses Public Buildings and Grounds: Salaries and Wages Other Expenses Shade Tree Commission: Other Expenses $ 253.44 1,524.10 $ 253.44 1,524.10 2,127.51 5,584.96 1,447.65 1,584.96 3,575.16 3,189.76 66.16 665.61 56.70 $ 253.44 1,524.10 3,243.81 1,584.96 331.35 66.16 3,855.37 3,627.46 66.16 227.91 320.63 377.33 376.70 0.63 79.63 1,305.00 79.63 1,305.00 680.00 79.63 625.00 5,850.00 10,631.36 16,481.36 10,575.00 5,906.36 2,316.01 4,005.91 6,321.92 5,839.12 482.80 173.06 1,462.25 635.31 173.06 462.25 3,345.00 3,345.00 345.00 $ 4,810.00 4,810.00 1,552.50 1.40 4,569.00 1.40 6,121.50 2,102.50 1.40 4,019.00 4,898.18 8,652.98 6,244.96 7,898.18 14,897.94 7,565.10 8,637.48 333.08 6,260.46 8,318.44 6,508.64 21,656.20 27,318.44 13,164.84 8,318.44 5,851.69 19,000.00 7,313.15 180.30 4,637.72 2,818.02 180.30 2,637.72 500.00 500.00 500.00 4.48 4.48 4.48 1,252.29 1,636.78 1,252.29 3,203.93 8,870.00 870.00 1,941.00 13,870.17 1,422.05 1,941.00 4,120.17 1,422.05 8,362.87 607.00 3,362.87 41,415.55 41,415.55 348.00 348.00 9,313.58 8,680.27 348.00 633.31 610.00 150.00 460.00 1,567.15 250.00 31,808.55 5,313.58 150.00 460.00 4,810.00 1,453.15 1,252.29 1,750.78 870.00 (139.74) 1,941.00 4,259.91 1,422.05 3,362.87 (Continued) -38- 19400 Exhibit SA-6 BOROUGH OF PENNS GROVE CURRENT FUND Statement of Appropriation Reserves For the Year Ended December 31, 2010 Balance After Modification Balance December 31, 2009 Encumbered Reserved Paid or Charged Lapsed to Fund Balance OPERATIONS -- WITHIN "CAPS" (CONT'D) Public Works Functions (Cont'd) Solid Waste Collection: Salaries and Wages Other Expenses Demolition Other Expenses Vehicle Maintenance: Other Expenses $ $ 1,269.00 2,900.52 1,000.36 $ 2,900.52 2,269.36 $ $ 1,307.81 2,900.52 961.55 500.00 500.00 5,408.05 16,379.61 22.97 945.00 22.97 945.00 2,339.00 3,049.00 700.00 700.00 700.00 1,587.89 1,248.82 87.89 1,248.82 87.89 1,248.82 2,434.60 479.95 2,914.55 2,609.60 304.95 Landfill/Solid Waste Disposal Costs Sanitary Landfill: Other Expenses 19,357.22 11,431.41 30,788.63 28,843.41 1,945.22 Utility Expenses and Bulk Purchases Electricity and Natural Gas Telecommunications Water Petroleum Products Sewage Processing & Disposa 12,169.35 2,988.43 77.45 9,524.07 117.50 986.56 1,305.21 11,302.81 977.50 26,655.91 3,988.43 1,382.66 14,826.88 1,095.00 26,641.17 3,755.05 144.68 9,524.07 117.50 14.74 233.38 1,237.98 5,302.81 977.50 112.00 497.42 1,266.88 497.42 1,378.88 112.00 497.42 1,266.88 65.00 880.22 1,935.83 880.22 2,000.83 65.00 880.22 1,935.83 5,182.25 0.50 0.50 5,182.25 0.50 0.50 5,400.00 6,740.00 5,400.00 6,740.00 Health and Human Services Safety Coordinator: Salaries and Wages Other Expenses Animal Control: Other Expenses Senior Citizen Transportation Other Expenses Board of Health Salaries and Wages Other Expenses Recreation and Education Recreations Services and Programs Other Expenses Code Enforcement and Administration Construction Code Official: Salaries and Wages Other Expenses Other Code Enforcement Functions: Salaries and Wages Other Expenses 10,971.56 710.00 Statutory Expenditures Social Security System (O.A.S.I.) Public Employees' Retirement System Police and Firemen's Retirement System of NJ 500.00 10,352.86 6,026.75 22.97 945.00 710.00 2,339.00 5,182.25 0.50 0.50 OPERATIONS -- EXCLUDED FROM "CAPS" LOSAP Revenue Administration (Tax Collection $ 143,054.54 $ 173,580.27 Cash Disbursed Accounts Payable -39- $ 316,634.81 3,340.08 $ 199,598.12 $ 191,201.93 8,396.19 $ 199,598.12 2,059.92 6,740.00 $ 117,036.69 19400 Exhibit SA-7 BOROUGH OF PENNS GROVE CURRENT FUND Statement of Tax Overpayments For the Year Ended December 31, 2010 Balance December 31, 2009 $ Increased by: Tax Overpayments 6,283.81 672.56 6,956.37 Decreased by: Refunded 5,846.14 Balance December 31, 2010 $ 1,110.23 Exhibit SA-8 CURRENT FUND Statement of Prepaid Taxes For the Year Ended December 31, 2010 Balance December 31, 2009 $ Increased by: Collections -- 2011 Taxes 67,968.67 57,310.88 125,279.55 Decreased by: Applied to 2010 Taxes Receivable 67,968.67 Balance December 31, 2010 $ -40- 57,310.88 19400 Exhibit SA-9 BOROUGH OF PENNS GROVE CURRENT FUND Statement of Due County Taxes For the Year Ended December 31, 2010 Increased by: County General Share of 2010 Levy County Open Space Preservation Share of 2009 Levy $ 1,531,878.13 35,754.17 $ 1,567,632.30 Decreased by: Disbursements $ 1,567,632.30 19400 Exhibit SA-10 CURRENT FUND Statement of Foreclosed Property For the Year Ended December 31, 2010 Balance December 31, 2009 $ Decreased by: Sales Adjustment $ 289,200.00 5,176.50 20,423.50 25,600.00 Balance December 31, 2010 $ -41- 263,600.00 19400 Exhibit SA-11 BOROUGH OF PENNS GROVE CURRENT FUND Statement of Regional School District Tax For the Year Ended December 31, 2010 Balance December 31, 2009 Prepaid $ Increased by: Calendar Year School Levy 21,423.00 2,062,622.54 2,041,199.54 Decreased by: Disbursements 1,807,756.12 Balance December 31, 2010 Payable $ 233,443.42 Exhibit SA-12 CURRENT FUND Statement of Accounts Payable For the Year Ended December 31, 2010 Balance December 31, 2009 $ Increased by: Transferred from Appropriation Reserves 7,476.88 8,396.19 Balance December 31, 2010 $ -42- 15,873.07 19400 Exhibit SA-13 BOROUGH OF PENNS GROVE CURRENT FUND Statement of Reserve for Revaluation For the Year Ended December 31, 2010 Balance December 31, 2009 $ Decreased by: Disbursements 58,922.50 10,000.00 Balance December 31, 2010 $ 48,922.50 Exhibit SA-14 CURRENT FUND Statement of Notes Payable - Special Emergencies For the Year Ended December 31, 2010 Balance December 31, 2009 $ Decreased by: Budget Appropriation 168,000.00 42,000.00 Balance December 31, 2010 $ 126,000.00 Analysis of Balance Revaluation Tax Map Revisions $ 120,000.00 6,000.00 $ 126,000.00 -43- 19400 Exhibit SA-15 BOROUGH OF PENNS GROVE FEDERAL AND STATE GRANT FUND Statement of Loan Receivable - HUD Special Purpose Grant For the Year Ended December 31, 2010 Balance December 31, 2009 $ Increased by: Loans Interest on Loans 31,056.33 $ 50,000.00 1,315.07 51,315.07 82,371.40 Decreased by: Due from Current Fund Collections 500.00 9,390.64 9,890.64 Balance December 31, 2010 $ 72,480.76 Exhibit SA-16 FEDERAL AND STATE GRANT FUND Statement of Reserve for Program Income For the Year Ended December 31, 2010 Balance December 31, 2009 $ 136,350.84 Increased by: Interest Earnings Receipts $ 189.54 16,200.00 $ 16,389.54 Collections of Loans Receivable HUD Special Purpose Grant by Current Fund Collections of Loans Receivable - HUD Special Purpose Grant 500.00 9,390.64 26,280.18 162,631.02 Decreased by: Disbursements: Loans 50,000.00 Balance December 31, 2010 $ 112,631.02 -44- 19400 Exhibit SA-17 BOROUGH OF PENNS GROVE FEDERAL AND STATE GRANT FUND Statement of Due Current Fund For the Year Ended December 31, 2010 Balance December 31, 2009 (Due to) $ Increased by: Federal & State Grant Fund Interest Earnings Disbursed by Current Fund Cancellation of Appropriated Reserves $ 22,671.93 245.77 113,873.82 91,401.69 205,521.28 228,193.21 Decreased by: Collected by Current Fund: Receipts Federal & State Grants Receivable Federal & State Grants Unappropriated $ 500.00 224,853.68 3,798.28 229,151.96 Cancellation of Grants Receivable Budget Appropriation Matching Grant Funds 2,024.60 1,718.21 232,894.77 Balance December 31, 2010 (Due from) $ -45- 4,701.56 19400 Exhibit SA-18 BOROUGH OF PENNS GROVE FEDERAL AND STATE GRANT FUND Statement of Federal and State Grants Receivable For the Year Ended December 31, 2010 Decreased by: Program Federal Grants: NJ Transportation Trust West Harmony III NJ Transportation Trust West Pitman Street I NJ Transportation Trust West Pitman Street II NJ Transportation Trust West Pitman Street III NJ Transportation Trust West Pitman Street IV NJ Transportation Trust Barber Avenue Small Cities CDBG Grant Installation of Wind Turbine at Sewerage Authority Over the Limit Under Arrest Click It or Ticket Safety Seat Belt Initiative Grant Balance Dec. 31, 2009 $ Revenue Anticipated Canceled 34,119.54 34,503.50 31,083.05 30,839.35 41,044.55 Balance Dec. 31, 2010 Received $ 34,119.54 $ 550.00 150,761.00 400,000.00 4,400.00 4,000.00 $ 559,161.00 State Grants: Clean Communities Recycling Tonnage Body Armor NJ Senior Citizen and Disabled Transportation Municipal Court Alcohol Education & Rehabilitation Neighborhood Preservation - Home 1,958.66 Total State Grants Receivable 1,958.66 93,316.07 175,425.35 $ 652,477.07 8,074.29 4,979.64 866.27 79,295.32 100.55 $ 400,000.00 950.00 4,000.00 4,000.00 1,326.70 173,466.69 34,503.50 31,083.05 30,839.35 41,044.55 $ 150,761.00 Total Federal Grants Receivable Total Grants Receivable Transferred from Unappropriated - 1,326.70 1,326.70 145,086.49 586,214.50 8,074.29 $ 4,979.64 866.27 70,726.08 100.55 5,005.41 1,958.66 79,767.19 5,005.41 $ 3,285.36 $ 224,853.68 $ 1,260.76 2,024.60 3,563.83 1,958.66 Federal and State Grants - Appropriated Fund Balance Current Fund 8,543.47 $ 8,543.47 $ 224,853.68 $ -46- 3,285.36 $ 224,853.68 $ 591,219.91 19400 Exhibit SA-19 BOROUGH OF PENNS GROVE FEDERAL AND STATE GRANT FUND Statement of Reserve for Federal and State Grants -- Appropriated For the Year Ended December 31, 2010 Transferred from Budget Appropriation Appropriated Balance Dec. 31, 2009 Program Federal Grants: NJ Transportation Trust West Harmony III NJ Transportation Trust West Pitman Street I NJ Transportation Trust West Pitman Street II NJ Transportation Trust West Pitman Street III NJ Transportation Trust West Pitman Street IV NJ Transportation Trust Barber Avenue Small Cities CDBG Grant Installation of Wind Turbine at Sewerage Authority Over the Limit Under Arrest Click It or Ticket Safety Seat Belt Initiative Grant $ Canceled $ $ 3,570.60 $ 150,761.00 400,000.00 4,400.00 4,000.00 2,800.00 1,260.76 84,872.66 559,161.00 21,852.51 9,132.27 8,343.27 5,045.34 4,233.64 2,980.79 0.21 6,155.65 9,225.05 29,725.97 8,792.23 2,405.72 1,475.35 7,514.97 8,079.00 8,074.29 4,979.64 866.27 79,295.32 100.55 1,718.21 7,407.32 2,850.00 3,259.27 74,997.26 103,109.46 95,034.28 187,982.12 15,768.60 150,761.00 400,000.00 3,200.00 4,000.00 4,000.00 1,260.76 $ Appropriated Balance Dec. 31, 2010 13,625.31 15,159.75 9,408.98 12,996.75 10,281.91 $ State Grants: Clean Communities Recycling Tonnage Body Armor NJ Senior Citizen and Disabled Transportation Municipal Court Alcohol Education & Rehabilitation Municipal Alliance on Alcoholism and Drug Abuse Drunk Driving Enforcement Hazardous Discharge Site - Tyrone Street Hazardous Discharge Site Hazardous Discharge Site - Broad Street School State & Local Hazard Operation Plan Domestic Violence Training Salem County - Recycling Incentive Grant Stormwater Management Realized as Revenue in Budget Local Match - Due from Current Fund Federal and State Grants Receivable Fund Balance Disbursed by Current Fund Disbursed by Federal & State Grant Fund 13,625.31 18,730.35 9,408.98 12,996.75 26,050.51 Cash Disbursements 52,451.55 569,729.60 9,799.24 10,472.91 2,652.34 8,531.70 3,081.34 1,718.21 1,149.62 0.21 5,006.03 9,225.05 29,725.97 8,792.23 2,405.72 1,475.35 5,725.72 1,789.25 8,079.00 $ 654,195.28 $ 652,477.07 1,718.21 $ -47- 654,195.28 93,170.93 $ 115,023.44 $ 113,873.82 1,149.62 $ 115,023.44 40,210.90 $ 92,662.45 $ 1,260.76 91,401.69 $ 92,662.45 64,761.91 $ 634,491.51 19400 Exhibit SA-20 BOROUGH OF PENNS GROVE FEDERAL AND STATE GRANT FUND Statement of Reserve for Federal and State Grants -- Unappropriated For the Year Ended December 31, 2010 Balance Dec. 31, 2009 State Grants: Recycling Tonnage Body Armor NJ Senior Citizen and Disabled Transportation $ 4,979.64 Received $ 2,194.42 1,603.86 Realized as Miscellaneous Revenue in 2010 Budget Balance Dec. 31, 2010 $ $ 2,194.42 1,603.86 $ 3,798.28 3,563.83 $ 8,543.47 -48- 4,979.64 3,563.83 $ 3,798.28 $ 8,543.47 SUPPLEMENTAL EXHIBITS TRUST FUND -49- 19400 Exhibit SB-1 BOROUGH OF PENNS GROVE TRUST FUNDS Statement of Trust Cash For the Year Ended December 31, 2010 Animal Control Balance December 31, 2009 Increased by Receipts: Dog License Fees Collected Due Current Fund Reserve for: Forfeiture Builder Deposits Compensated Balances Payroll Public Defender Fees Outside Employment of Officers Tax Title Lien Redemptions Decreased by Disbursements: Due State Department of Health Expenditures Under R.S. 4:19-15.11 Due Current Fund Reserve for: Builder Deposits Compensated Balances Payroll Public Defender Fees Outside Employment of Officers Tax Title Lien Redemptions $ $ Other 5,206.68 4,702.00 20.63 $ $ 240,908.20 672.40 0.03 8,679.64 4,167.76 2,737,619.02 2,978.00 15,244.06 614,813.64 4,722.63 3,384,174.55 9,929.31 3,625,082.75 787.80 3,650.71 6,202.83 2,824.88 7,799.76 2,739,255.92 5,458.19 15,240.14 626,437.57 4,438.51 Balance December 31, 2010 $ -50- 5,490.80 3,403,219.29 $ 221,863.46 19400 Exhibit SB-2 BOROUGH OF PENNS GROVE TRUST -- ANIMAL CONTROL FUND Statement of Reserve for Dog Fund Expenditures For the Year Ended December 31, 2010 Balance December 31, 2009 $ Increased by: Dog License Fees Collected 4,881.56 4,702.00 9,583.56 Decreased by: Due to State of New Jersey Board of Health Expenditures Under R.S.4:19- 15.11 $ 819.00 3,650.71 4,469.71 Balance December 31, 2010 $ License Fees Collected Year 5,113.85 Amount 2009 2008 $ 2,945.00 2,804.00 $ 5,749.00 Exhibit SB-3 TRUST -- ANIMAL CONTROL FUND Statement of Due to Current Fund For the Year Ended December 31, 2010 Balance December 31, 2009 $ Increased by: Receipts - Interest on Deposits 292.72 20.63 Balance December 31, 2010 $ -51- 313.35 19400 Exhibit SB-4 BOROUGH OF PENNS GROVE TRUST -- ANIMAL CONTROL FUND Statement of Due to State of New Jersey For the Year Ended December 31, 2010 Balance December 31, 2009 $ Increased by: Transferred from Reserve for Dog Fund Expenditures 32.40 819.00 851.40 Decreased by: Disbursements 787.80 Balance December 31, 2010 $ -52- 63.60 19400 Exhibit SB-5 BOROUGH OF PENNS GROVE TRUST -- OTHER FUNDS Statement of Due Current Fund For the Year Ended December 31, 2010 Balance December 31, 2009 (Due from) $ Increased by: Collected by Current Fund Disbursed to Current Fund as MRNA $ 1,850.33 44.00 6,202.83 6,246.83 8,097.16 Decreased by: Escheated Tax Sale Premiums Receipts - Interest Earned on Deposits 21,682.28 672.40 22,354.68 Balance December 31, 2010 (Due to) $ 14,257.52 Analysis of Balance Dec. 31, 2010 Builder Deposits Payroll POAA Tax Title Lien Redemptions $ (70.56) (14,526.80) 372.00 (32.16) $ 14,257.52 -53- 19400 Exhibit SB-6 BOROUGH OF PENNS GROVE TRUST -- OTHER FUNDS Statement of Changes in Reserves For the Year Ended December 31, 2010 Increased by Balance Dec. 31, 2009 Reserve for: Dedicated Uniform Fire Fees Forfeiture Builder Deposits Compensated Balances Payroll Public Defender Fees POAA Outside Employment of Officers Tax Title Lien Redemptions $ $ 2,625.00 6.70 40,293.15 33,931.10 22,549.27 2,480.19 328.00 140,545.12 242,758.53 Interest Earnings $ Decreased by Receipts Other Other Balance Dec. 31, 2010 $ 2,625.00 6.73 46,147.91 30,299.10 20,912.37 0.00 372.00 3.92 107,238.91 $ 207,605.94 0.03 $ 167.76 8,679.64 4,000.00 2,737,619.02 2,978.00 $ $ 16.66 $ Disbursements 184.45 44.00 15,227.40 614,813.64 $ 3,383,317.70 -54- $ 2,824.88 7,799.76 2,739,255.92 5,458.19 44.00 15,240.14 626,437.57 $ 21,682.28 $ 3,397,016.46 $ 21,682.28 SUPPLEMENTAL EXHIBITS GENERAL CAPITAL FUND -55- 19400 Exhibit SC-1 BOROUGH OF PENNS GROVE GENERAL CAPITAL FUND Statement of General Capital Cash For the Year Ended December 31, 2010 Balance December 31, 2009 $ Increased by Receipts: Capital Improvement Fund Budget Appropriation - Current Fund Due Current Fund Reserve for Riverwalk Project $ 37,930.43 10,000.00 85.14 11.76 10,096.90 48,027.33 Decreased by Disbursements: Due Current Fund Bond Anticipation Notes 20,000.00 300.00 20,300.00 Balance December 31, 2010 Analysis of Balance Capital Account Green Trust Account Fenwick Commons LLC Escrow -56- $ 27,727.33 $ 19,886.15 1,289.26 6,551.92 $ 27,727.33 19400 Exhibit SC-2 BOROUGH OF PENNS GROVE GENERAL CAPITAL FUND Analysis of General Capital Cash For the Year Ended December 31, 2010 Receipts Balance (Deficit) Dec. 31, 2009 Capital Improvement Fund Due to Current Fund Due from Federal & State Grant Fund Reserve for Heating System Reserve for Riverwalk Project Reserve for Payment of Notes Improvement Authorizations: Ordinance Number 97-03 97-16 03-16 05-04 05-05 05-06 05-09 07-12 10-15 $ 48,413.74 (36,377.71) (40,000.00) 25,000.00 53.04 18,792.19 Miscellaneous Disbursements Bond Anticipation Notes Miscellaneous $ 10,000.00 85.14 $ 20,000.00 Transfers To From $ 16,474.09 $ 10,500.00 11.76 (19,380.92) 2,375.90 6,292.95 402.24 2,903.00 25,000.00 4,500.00 (44.00) $ 64,387.83 (56,292.57) (40,000.00) 25,000.00 64.80 18,792.19 (19,380.92) 2,375.90 6,292.95 402.24 2,903.00 25,000.00 4,500.00 $ 300.00 (344.00) 10,500.00 10,500.00 $ 37,930.43 Balance (Deficit) Dec. 31, 2010 $ 10,096.90 $ 300.00 -57- $ 20,000.00 $ 26,974.09 $ 26,974.09 $ 27,727.33 19400 Exhibit SC-3 BOROUGH OF PENNS GROVE GENERAL CAPITAL FUND Statement of Reserve for Riverwalk Project For the Year Ended December 31, 2010 Balance December 31, 2009 $ Increased by: Fenwick Commons Account - Interest Earnings 53.04 11.76 Balance December 31, 2010 $ 64.80 Exhibit SC-4 BOROUGH OF PENNS GROVE GENERAL CAPITAL FUND Statement of Deferred Charges to Future Taxation -- Funded For the Year Ended December 31, 2010 Balance December 31, 2009 $ Decreased by: Budget Appropriation - Payment of Green Trust Principal Balance December 31, 2010 30,426.57 $ -58- 607,263.36 576,836.79 19400 Exhibit SC-5 BOROUGH OF PENNS GROVE GENERAL CAPITAL FUND Statement of Deferred Charges to Future Taxation -- Unfunded For the Year Ended December 31, 2010 Analysis of Balance Dec. 31, 2010 Increased by: Ordinance Number 97-03 97-16 06-28 07-09 07-11 07-12 10-15 Improvement Description Purchase of Ambulance and Trash Truck Various Improvements Construction of a Riverfront Walk Construction of a Riverfront Walk Rehabilitation of the Penns Grove Wastewater Treatment Plant Acquisition of a Street Sweeper Acquisition of Refuse Truck Balance Dec. 31, 2009 $ Decreased by: 2010 Authorizations 78,835.00 9,910.00 228,000.00 100,000.00 Canceled $ 59,454.08 9,910.00 7,156.00 $ 199,500.00 $ 199,500.00 $ 76,520.08 -59- Balance Dec. 31, 2010 $ $ 228,000.00 152,000.00 $ 796,745.00 Payment of Notes $ 19,380.92 6,000.00 12,000.00 222,000.00 88,000.00 33,000.00 16,000.00 195,000.00 128,844.00 199,500.00 67,000.00 $ 852,724.92 Expenditures $ Financed by Bond Anticipation Notes Unexpended Improvement Authorization 19,380.92 $ 222,000.00 88,000.00 344.00 195,000.00 128,500.00 $ 199,500.00 $ 19,724.92 $ 633,500.00 $ 199,500.00 19400 Exhibit SC-6 BOROUGH OF PENNS GROVE GENERAL CAPITAL FUND Statement of Capital Improvement Fund For the Year Ended December 31, 2010 Balance December 31, 2009 $ Increased by: Cancelled Improvement Authorizations Budget Appropriation - Current Fund $ 48,413.74 16,474.09 10,000.00 26,474.09 74,887.83 Decreased by: Improvement Authorization 10,500.00 Balance December 31, 2010 $ 64,387.83 Exhibit SC-7 GENERAL CAPITAL FUND Statement of Due from Current Fund For the Year Ended December 31, 2010 Balance December 31, 2009 $ Increased by: Disbursed to Current Fund 36,377.71 20,000.00 56,377.71 Decreased by: Interest Earnings 85.14 Balance December 31, 2010 $ -60- 56,292.57 19400 Exhibit SC-8 BOROUGH OF PENNS GROVE GENERAL CAPITAL FUND Statement of Improvement Authorizations For the Year Ended December 31, 2010 Improvement Description Purchase of Ambulance and Trash Truck Various Improvements Reconstruction of West Harmony Street Upgrade of Police Computers Installation of New Phone System Paving of Borough Parking Lot Acquisition of an Emergency Response Vehicle Acquisition of a Street Sweeper Acquisition of Refuse Truck Balance Dec. 31, 2009 Funded Unfunded Ordinance Number Amount 97-03 97-16 03-16 05-04 05-05 05-06 05-09 07-12 10-15 $ 240,000.00 135,000.00 15,000.00 25,000.00 20,000.00 25,000.00 141,000.00 160,000.00 210,000.00 $ 2,375.90 6,292.95 402.24 2,903.00 25,000.00 4,500.00 2010 Authorizations $ 59,454.08 9,910.00 Canceled $ 59,454.08 12,285.90 6,292.95 402.24 2,903.00 $ 25,000.00 4,500.00 7,156.00 7,156.00 $ 210,000.00 $ 41,474.09 $ 76,520.08 Deferred Charges to Future Taxation - Unfunded Capital Improvement Fund -61- Balance Dec. 31, 2010 Funded Unfunded $ 210,000.00 $ 92,994.17 $ 199,500.00 10,500.00 $ 76,520.08 16,474.09 $ 210,000.00 $ 92,994.17 10,500.00 $ 199,500.00 $ 35,500.00 $ 199,500.00 19400 Exhibit SC-9 BOROUGH OF PENNS GROVE GENERAL CAPITAL FUND Statement of Green Trust Loan Payable For the Year Ended December 31, 2010 Purpose Barber Avenue Park Construction of Riverwalk Date of Issue Amount of Original Issue 2004 $ 58,866.99 2007 99,900.00 Maturities of Bonds Outstanding December 31, 2010 Date Amount Interest Rate Balance Dec. 31, 2009 2011 2012 2013 2014 2015 2016 2017 2018 4,191.29 4,275.53 4,361.46 4,449.13 4,538.56 4,629.79 4,722.84 2,396.92 2.00% $ 37,674.22 4,789.11 4,885.37 4,983.57 5,083.74 5,185.92 5,290.16 5,396.49 5,504.97 5,615.62 5,728.48 5,843.63 5,961.08 6,080.91 6,203.13 6,327.82 3,211.45 2.00% 90,786.20 $ 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Payments $ Balance Dec. 31, 2010 4,108.70 $ 33,565.52 4,694.75 86,091.45 (Continued) -62- 19400 Exhibit SC-9 BOROUGH OF PENNS GROVE GENERAL CAPITAL FUND Statement of Green Trust Loan Payable For the Year Ended December 31, 2010 Purpose Construction of Riverwalk Date of Issue Amount of Original Issue 2008 $ 500,000.00 Maturities of Bonds Outstanding December 31, 2010 Date Amount Interest Rate Balance Dec. 31, 2009 Payments Balance Dec. 31, 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2.00% $ 478,802.94 $ 21,623.12 $ 457,179.82 $ 607,263.36 $ 30,426.57 $ 576,836.79 $ 22,057.74 22,501.10 22,953.37 23,414.73 23,885.37 24,365.46 24,855.21 25,354.80 25,864.44 26,384.31 26,914.63 27,455.62 28,007.48 28,570.42 29,144.69 29,730.50 30,328.08 15,391.87 -63- 19400 Exhibit SC-10 BOROUGH OF PENNS GROVE GENERAL CAPITAL FUND Statement of Bond Anticipation Notes For the Year Ended December 31, 2010 Ordinance Number Improvement Description 06-28 07-09 07-11 07-12 Construction of a Riverfront Walk Construction of a Riverfront Walk Rehabilitation of the Penns Grove Wastewater Treatment Plant Acquisition of a Street Sweeper Date of Issue of Original Note Date of Issue Date of Maturity Interest Rate 5/25/07 5/25/07 5/20/09 5/19/10 5/19/10 5/19/11 2.44% 2.13% 5/25/07 5/25/07 5/20/09 5/19/10 5/19/10 5/19/11 2.44% 2.13% 100,000.00 12/28/07 12/28/07 12/17/09 12/16/10 12/16/10 12/16/11 1.95% 1.20% 228,000.00 12/28/07 12/28/07 12/17/09 12/16/10 12/16/10 12/16/11 1.95% 1.20% 144,800.00 Balance Dec. 31, 2009 $ -64- 228,000.00 Decrease $ $ $ 222,000.00 100,000.00 88,000.00 228,000.00 195,000.00 195,000.00 144,800.00 128,500.00 700,800.00 Balance Dec. 31, 2010 228,000.00 222,000.00 88,000.00 $ Paid by Budget Appropriations Cash Renewals Increase $ 633,500.00 $ 633,500.00 $ 633,500.00 128,500.00 $ 700,800.00 $ 67,000.00 300.00 633,500.00 $ 700,800.00 $ 633,500.00 19400 Exhibit SC-11 BOROUGH OF PENNS GROVE GENERAL CAPITAL FUND Statement of Bonds and Notes Authorized But Not Issued For the Year Ended December 31, 2010 Ordinance Number 97-03 97-16 07-12 10-15 Balance Dec. 31, 2009 Purchase of Ambulance and Trash Truck Various Improvements Acquisition of a Street Sweeper Acquisition of Refuse Truck $ Increased by: 2010 Note Authorizations Not Renewed 78,835.00 9,910.00 7,200.00 Decreased by Cancellation $ $ 300.00 $ 300.00 59,454.08 9,910.00 7,156.00 $ 76,520.08 $ 219,224.92 $ 199,500.00 $ 95,945.00 -65- $ 199,500.00 $ Balance Dec. 31, 2010 19,380.92 344.00 199,500.00 BOROUGH OF PENNS GROVE PART 2 SCHEDULE OF FINDINGS AND RECOMMENDATIONS FOR THE YEAR ENDED DECEMBER 31, 2010 -66- 19400 BOROUGH OF PENNS GROVE Schedule of Findings and Recommendations For the Year Ended December 31, 2010 Schedule of Financial Statement Findings This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance related to the financial statements that are required to be reported in accordance with Government Auditing Standards and with audit requirements as prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey. Finding No. 2010-01 Criteria or Specific Requirement Government Accounting Standards Board, Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other than Pensions, requires all local governments to establish standards for the measurement, recognition, and display of OPEB expense/expenditures and related liabilities (assets), note disclosures, and, if applicable, required supplementary information (RSI) in the financial report of the local government. Condition The Borough did not obtain an actuarial valuation of its Other Post Employment Benefits (OPEB) required for footnote disclosure. For CY 2010, the Borough provided its employees and retirees, health insurance coverage through Horizon Blue Cross Blue Shield of New Jersey. Effect The Borough’s note disclosure for Other Post Employment Benefits Other than Pensions does not comply with the provisions of Government Accounting Standards Board, Statement No. 45. Cause The Borough did not obtain the required actuarial valuation of its OPEB. Recommendation That the Borough obtain an actuarial valuation of its Other Post Employment Benefits (OPEB) for proper footnote disclosure. View of Responsible Officials and Planned Corrective Action The responsible officials agree with the finding and will address the matter as part of their corrective action plan. -67- 19400 BOROUGH OF PENNS GROVE Schedule of Findings and Recommendations For the Year Ended December 31, 2010 Schedule of Financial Statement Findings (Cont'd) Finding No. 2010-02 Criteria or Specific Requirement Fees collected during a month should be remitted to the Treasurer within a reasonable time period in the following month. Condition All receipts collected by the Construction Office were not transferred to the Treasurer in the following month. Effect Understatement of Current Fund Construction Revenues. Cause Lack of established internal control policies and procedures. Recommendation That all receipts collected by the Construction Office be transferred to the Treasurer in the following month. View of Responsible Officials and Planned Corrective Action The responsible officials agree with the finding and will address the matter as part of their corrective action plan. Finding No. 2010-03 Criteria or Specific Requirement N.J.A.C. 5:23-4.17. Condition 2010 Uniform Construction Code Annual Report was not provided for examination. Effect Non-compliance with N.J.A.C. 5:23-4.17. Cause Unknown. Recommendation That the Uniform Construction Code Annual Report be provided for examination when requested. View of Responsible Officials and Planned Corrective Action The responsible officials agree with the finding and will address the matter as part of their corrective action plan. -68- 19400 BOROUGH OF PENNS GROVE Schedule of Findings and Recommendations For the Year Ended December 31, 2010 Schedule of Financial Statement Findings (Cont'd) Finding No. 2010-04 Criteria or Specific Requirement N.J.A.C. 5:30-5.6 requires that municipalities maintain a fixed asset accounting system that shall include asset descriptions, estimated or historical costs and other such information as shall be required by the governing body and updated each year with any additions or deletions. Proper internal control practices also dictate that complete and accurate records should be maintained to ensure adequate control over the preparation of financial statements including the related footnotes. Condition A general fixed asset accounting system was not properly maintained for the year 2010. Effect As the result of the non existence of controls over the Borough’s fixed asset records, the General Fixed Asset Account Statements could not be prepared and audited resulting in a qualified opinion being issued on the General Fixed Assets Account Group. Cause Internal control policies and procedures are not in place to properly maintain the fixed asset accounting system. Recommendation That internal control policies and procedures be developed to properly maintain the general fixed asset accounting system in accordance with N.J.A.C. 5:30-5.6. View of Responsible Officials and Planned Corrective Action The responsible officials agree with the finding and will address the matter as part of their corrective action plan. -69- 19400 BOROUGH OF PENNS GROVE Summary Schedule of Prior Year Audit Findings and Questioned Costs as Prepared by Management This section identifies the status of prior year findings related to the financial statements and Federal Awards and State Financial Assistance that are required to be reported in accordance with Government Auditing Standards, OMB Circular A-133 and State of New Jersey Circular 04-04-OMB. FINANCIAL STATEMENT FINDINGS Finding No. 2009-01 Condition Supporting bid documentation for the purchase of gasoline was unavailable for audit. Current Status This condition has been resolved. Finding No. 2009-02 Condition Records reflect some landlords paying a registration fee one year but not the following year, with tax records showing no change in property ownership. Current Status This condition has been resolved. Finding No. 2009-03 Condition The Borough did not obtain an actuarial valuation of its Other Post Employment Benefits (OPEB) required for footnote disclosure. For CY 2009, the Borough provided its employees and retirees, health insurance coverage through Horizon Blue Cross Blue Shield of New Jersey. Current Status This condition has not been resolved and is current year finding 2010-01. Corrective Action Plan The Borough will obtain actuarial valuation if funds are available. FEDERAL AWARDS None STATE FINANICAL ASSISTANCE PROGRAMS None -70- 19400 BOROUGH OF PENNS GROVE Officials in Office and Surety Bonds The following officials were in office during the period under audit: Name John A. Washington Tami L. King Eric Meyers Carol Mincey Mark Oliver Clifford E. Poindexter Joseph Venello Sharon Williams Stephen Labb Marie Danks Patricia Capasso Gallo Marie Louise Procacci Jeryl Goff Nicholas T. Lacovara Sharon O. Bye Charmaine Bennefield Adam Telsey Mark Brunermer David Avedissian Gary Salber Title Mayor Councilperson Councilperson Councilperson Councilperson Councilperson Councilperson Borough Clerk, Municipal Improvement Search Officer, Registrar of Vital Statistics Chief Financial Officer Deputy Treasurer Tax Collector, Tax Search Officer Tax Assessor Construction Code Official Municipal Judge Court Administrator Deputy Court Administrator Solicitor Engineer Borough Prosecutor Public Defender All employees are covered under a Blanket Surety Bond from the Joint Insurance Fund in the amount of $1,000,000. -71- -72-