Forensic audit finds accounting weaknesses, recommends tighter reserves and grant controls; auditors report no evidence of fraud

Matthew Harmon and Joe Sarno of HFA Certified Public Accountants presented a forensic audit of Clifton’s financial records for fiscal years 2019 and 2023 at a Sept. 25 council meeting. The audit examined budget and appropriations, capital and debt, grants, trust funds, payroll and benefits, and procurement. HFA said it performed document testing, data and analytical testing, control walkthroughs and investigative procedures including interviews, and reviewed up to a 10‑year lookback to form expectations.

HFA’s principal findings included noncompliance with a 2014 fund‑balance policy, instances where the city had relied on one‑time revenues repeatedly, gaps in public documentation for the city’s use of 2021 American Rescue Plan Act (ARPA) funding, instances of grant balances canceled without clear follow‑up, trust funds recorded without formal state approval and several payroll and benefit control weaknesses including incorrect Chapter 78 health‑benefit deductions in sample testing. In presenting recommendations, the auditors emphasized improved reserve management, a capital…