Bill Text: NJ A5299 | 2026-2027 | Regular Session | Introduced
Bill Title: Requires local budgets to be prepared using generally accepted accounting principles.
Sponsorship: Partisan Bill (Democrat 1)
Status: (Introduced) 2026-06-23 - Introduced, Referred to Assembly State and Local Government Committee [A5299 Detail]
Download: New_Jersey-2026-A5299-Introduced.html
Sponsored by:
Assemblywoman VERLINA REYNOLDS-JACKSON
District 15 (Hunterdon and Mercer)
SYNOPSIS
Requires local budgets to be prepared using generally accepted accounting principles.
CURRENT VERSION OF TEXT
As introduced.
An Act requiring local budgets to be prepared using generally accepted accounting principles, amending various sections of statutory law, and supplementing chapter 5 of Title 40A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) The Local Finance Board shall prescribe a uniform system of double entry bookkeeping which is consistent with the generally accepted accounting principles established by the Governmental Accounting Standards Board for use in all local units and require the maintenance and use of the same.
2. R.S.40:5-2 is amended to read as follows:
40:5-2. Any county or municipality may make a voluntary contribution of not more than $125,000 annually to any duly incorporated first aid and emergency or volunteer ambulance or rescue squad association of the county, or of any municipality therein, rendering service generally throughout the county, or any of the municipalities thereof. In addition, if any such associations experience extraordinary need, the county or municipality may contribute an additional amount of not more than $70,000 annually; provided, however, that the need for such additional funds is established by the association and is directly related to the performance of said association's duties. Whenever the total annual county or municipal contribution to an association exceeds $70,000, the chief financial officer of the county or municipality shall receive an audit performed by a certified public accountant [or a registered municipal accountant] of each association's financial records for the current year which shall certify to the governing body of the county or municipality that such records are being maintained in accordance with [sound] generally accepted accounting principles.
Any county or municipality may appropriate such additional sums as it may deem necessary for the purchase of first aid, ambulance, rescue or other emergency vehicles, equipment, supplies and materials for use by these associations, the title to which shall remain with the county or municipality, provided that the funds are controlled and disbursed by the county or municipality.
In the case of a joint purchase made by the governing bodies of two or more local units pursuant to the provisions of the "Consolidated Municipal Services Act," P.L.1952, c.72 (C.40:48B-1 et seq.), the title to the purchase shall be held by the joint meeting formed by the contracting governing bodies.
(cf: P.L.2022, c.12, s.1)
3. Section 1 of P.L.1952, c.303 (C.40:11A‑6.1) is amended to read as follows:
It shall be the duty of every "parking authority," created pursuant to the act to which this act is a supplement, to cause an annual audit of the accounts of the authority to be made and filed with the authority, and for this purpose the authority shall employ a registered municipal accountant of New Jersey or a certified public accountant of New Jersey. The audit shall be completed and filed with the authority within four months after the close of the fiscal year of the authority and a certified duplicate copy thereof shall be filed with the Director of the Division of Local Government Services in the Department of [the Treasury] Community Affairs within five days after the original report is filed with the authority.
(cf: P.L.1952, c.303, s.1)
4. Section 1 of P.L.1952, c.301 (C.40:14A-7.1) is amended to read as follows:
It shall be the duty of every "sewerage authority," created pursuant to the act to which this act is a supplement, to cause an annual audit of the accounts of the authority to be made and filed with the authority, and for this purpose the authority shall employ [a registered municipal accountant of New Jersey or] a certified public accountant of New Jersey. The audit shall be completed and filed with the authority within four months after the close of the fiscal year of the authority and a certified duplicate copy thereof shall be filed with the Director of the Division of Local Government Services in the Department of [the Treasury] Community Affairs within five days after the original report is filed with the authority.
(cf: P.L.1952, c.301, s.1)
5. Section 66 of P.L.1957, c.183 (C.40:14B-66) is amended to read as follows:
Each municipal authority shall cause an annual audit of its accounts to be made, and for this purpose it shall employ [a registered municipal accountant of New Jersey or] a certified public accountant of New Jersey. The audit shall be completed and filed with the municipal authority within [4] four months after the close of the fiscal year of the municipal authority and a certified duplicate copy thereof shall be filed with the Director of the Division of Local Government Services in the Department of [the Treasury] Community Affairs within [5] five days after the original report is filed with the municipal authority.
(cf: P.L.1957, c.183, s.66)
6. Section 11 of P.L.1962, c.134 (C.40:33-13.13) is amended to read as follows:
The treasurer of the board of trustees shall receive and hold, in behalf of the board, all funds of the library and shall pay out or transfer such funds, as directed by resolution of the board of trustees, by check signed by [him] the treasurer and countersigned by the president of the board of trustees or other trustee or trustees designated by the board of trustees. The treasurer shall give adequate bond or bonds, conditioned for the faithful performance and discharge of his duties, payable to the board of trustees and to the participating counties, in an amount or amounts required by the board of trustees. All accounts and financial transactions of the regional library shall be audited annually by a registered municipal accountant of New Jersey and filed with the Director of the Division of Local Government Services in the Department of Community Affairs on or before May 31.
(cf: P.L.1962, c.134, s.11)
7. Section 12 of P.L.1946, c.276 (C.40:37-95.12) is amended to read as follows:
The commission shall at all times keep or cause to be kept full and accurate accounts of its receipts and expenditures, and of its resources and liabilities, and shall prepare or cause to be prepared detailed annual statements thereof, and shall employ the services of the Division of Local Government [of] Services in the [State] Department of [Taxation and Finance] Community Affairs or of a competent [registered municipal] certified public accountant of New Jersey to audit, annually, the books, accounts and statements of the commission, and shall cause copies of [said] the annual audits, when completed, to be preserved as part of its permanent records and shall transmit certified copies of [such] the audits to the board of [chosen freeholders] county commissioners of [said] the county.
(cf: P.L.1946, c.276, s.12)
8. Section 45 of P.L.1960, c.183 (C.40:37A-88) is amended to read as follows:
Each authority shall cause an annual audit of its accounts to be made, and for this purpose it shall employ [a registered municipal accountant of New Jersey or] a certified public accountant of New Jersey. The audit shall be completed and filed with the authority within [4] four months after the close of the fiscal year of the authority and a certified duplicate copy thereof shall be filed in the office of the Division of Local Government Services in the Department of [the Treasury] Community Affairs and in the office of the treasurer of the county within [5] five days after the original report is filed with the authority.
(cf: P.L.1960, c.183, s.45)
9. Section 44 of P.L.1967, c.136 (C.40:37B-44) is amended to read as follows:
Each authority shall cause an annual audit of its accounts to be made and for this purpose it shall employ [a registered municipal accountant of New Jersey or] a certified public accountant of New Jersey. The audit shall be completed and filed with the authority within [4] four months after the close of the fiscal year of the authority and a certified duplicate copy thereof shall be filed in the office of the Division of Local Government Services in the Department of [the Treasury] Community Affairs and in the office of the treasurer of the county, within [5] five days after the original report is filed with the authority.
(cf: P.L.1967, c.136, s.44)
10. Section 18 of P.L.1973, c.376 (C.40:37C-18) is amended to read as follows:
It shall be the duty of every authority created pursuant to this act to cause an annual audit of the accounts of the authority to be made and filed with the authority, and for this purpose the authority shall employ [a registered municipal accountant of New Jersey or] a certified public accountant of New Jersey. The audit shall be completed and filed with the authority within [4] four months after the close of the fiscal year of the authority and a certified duplicate copy thereof shall be filed with the Director of the Division of Local Government Services in the Department of Community Affairs within [5] five days after the original report is filed with the authority. Every authority created pursuant to this act shall file a certified copy of every bond resolution with the Director of the Division of Local Government Services in the Department of Community Affairs and in addition shall file a certified copy of all bond proceedings with the director.
(cf: P.L.1973, c.376, s.18)
11. R.S.40:62-2 is amended to read as follows:
Any municipality engaged in the business of operating any light, heat or power plant or works or engaged in the business of transportation, shall, with respect to such business and the property and plant used by it:
a. keep its books, records and accounts in the same manner as provided by statute for keeping other books, records and accounts of a municipality, and file with the Board of Public Utility Commissioners a copy of its Annual Report of Audit by a [registered municipal] certified public accountant if the municipality provides light, heat or power only within the limits of the municipality;
b. keep its books, records and accounts and make reports to the board in a manner and form and to the same extent as the board shall from time to time require of other public utilities in similar businesses in all other situations;
c. comply with all rules, regulations and recommendations as to reasonable standards and service to the same extent as the board shall from time to time require of other public utilities engaged in other similar businesses. The Board of Public Utility Commissioners shall have power and authority to enforce the provisions of this section.
(cf: P.L.1973, c.277, s.1)
12. Section 1 of P.L.1952, c.304 (C.40:66A-7.1) is amended to read as follows:
1. It shall be the duty of every "incinerator or environmental services authority," created pursuant to the act to which this act is a supplement, to cause an annual audit of the accounts of the authority to be made and filed with the authority, and for this purpose the authority shall employ [a registered municipal accountant of New Jersey or] a certified public accountant of New Jersey. The audit shall be completed and filed with the authority within four months after the close of the fiscal year of the authority and a certified duplicate copy thereof shall be filed with the Director of the Division of Local Government Services in the Department of Community Affairs within five days after the original report is filed with the authority.
(cf: P.L.2012, c.31, s.8)
13. Section 7.1 of P.L.1968, c.249 (C.40:66A-39) is amended to read as follows:
It shall be the duty of every "solid waste management authority," created pursuant to this act, to cause an annual audit of the accounts of the authority to be made and filed with the authority, and for this purpose the authority shall employ [a registered municipal accountant of New Jersey or] a certified public accountant of New Jersey. The audit shall be completed and filed with the authority within [4] four months after the close of the fiscal year of the authority and a certified duplicate copy thereof shall be filed with the Director of the Division of Local Government Services in the Department of [the Treasury] Community Affairs within 10 days after the original report is filed with the authority.
(cf: P.L.1968, c.249, s.7.1)
14. Section 23 of P.L.1967, c.184 (C.40:68-49) is amended to read as follows:
It shall be the duty of every Beach Erosion Control Commission created pursuant to this act to cause an annual audit of the accounts of the commission to be made and filed with the commission, and for this purpose the commission shall employ [a registered municipal accountant of New Jersey or] a certified public accountant of New Jersey. The audit shall be completed and filed with the commission within [4] four months after the close of the fiscal year of the commission and a certified duplicate copy thereof shall be filed with the Director of the Division of Local Government Services in the Department of [the Treasury] Community Affairs and the municipal clerk of the municipality in which the district is situate within [5] five days after the original report is filed with the commission.
(cf: P.L.1967, c.184, s.23)
15. Section 1 of P.L.1952, c.305 (C.40:68A-7.1) is amended to read as follows:
It shall be the duty of every "port authority," created pursuant to the act to which this act is a supplement, to cause an annual audit of the accounts of the authority to be made and filed with the authority, and for this purpose the authority shall employ [a registered municipal accountant of New Jersey or] a certified public accountant of New Jersey. The audit shall be completed and filed with the authority within four months after the close of the fiscal year of the authority and a certified duplicate copy thereof shall be filed with the Director of the Division of Local Government Services in the Department of [the Treasury] Community Affairs within five days after the original report is filed with the authority.
(cf: P.L.1952, c.305, s.1)
16. Section 38 of P.L.1960, c.192 (C.40:68A-66) is amended to read as follows:
Each municipal port authority shall cause an annual audit of its accounts to be made, and for this purpose it shall employ [a registered municipal accountant of New Jersey or] a certified public accountant of New Jersey. The audit shall be completed and filed with the municipal port authority within [4] four months after the close of the fiscal year of the municipal port authority and a certified duplicate copy thereof shall be filed in the office of the Division of Local Government Services in the Department of [the Treasury] Community Affairs and in the office of the chief financial officer of the local unit within [5] five days after the original report is filed with the municipal port authority.
(cf: P.L.1960, c.192, s.38)
17. N.J.S.40A:5-4 is amended to read as follows:
40A:5-4. The governing body of every local unit shall cause an annual audit of its books, accounts, and financial transactions to be made and completed no later than the last day of the eighth month after the close of the fiscal year of the local unit. The governing body of every local unit may, by resolution, petition the Director of the Division of Local Government Services in the Department of Community Affairs for an extension to complete and file the annual audit with the division. Upon good cause being shown, the director may grant an extension upon whatever terms or conditions the director may deem reasonable. The determination of the director in the granting of an extension is final. The local unit shall be responsible for any necessary investigation and corrective action on audit findings pursuant to this section.
The governing body of every local unit shall employ a [registered municipal] certified public accountant of New Jersey to prepare its annual audit or it shall enter into an agreement with the Director of the Division of Local Government Services for an annual audit to be made by qualified employees of the division. The director shall establish a fee based upon the time spent and other expenses incurred by qualified employees of the division when conducting the annual audit for a local unit. The local unit shall, upon request for payment for audit services, forward a check to the director, payable to the State Treasurer.
If one or more governing body members or other responsible officials of the local unit fail or refuse to comply with this section and has received an order from the director to do so, the individual or individuals who willfully fail or refuse to comply shall each be subject to a personal penalty of $100 for each day after the date fixed for final action that failure or refusal to comply continues. The amount of the penalty may be recovered by the director in the name of the State as a personal debt of the individual and shall be paid, upon receipt, into the State Treasury.
(cf: P.L.2025, c.185, s.8)
18. N.J.S.40A:5-6 is amended to read as follows:
Every [such registered municipal] certified public accountant shall file the original report of [his] the audit and recommendations with the clerk and shall, within [5] five days thereafter, file a certified duplicate copy thereof, over [his] the certified public accountant's signature, in the office of the director.
(cf: N.J.S.40A:5‑6)
19. N.J.S.40A:5-7 is amended to read as follows:
A synopsis of all audits, together with the recommendations made by the [registered municipal] certified public accountant, shall be prepared and published by the clerk of the local unit at least once in the official newspaper of the local unit, if there be one, or if there be none, in a newspaper published in the local unit, and published on the public entity's official Internet website pursuant to P.L.2025, c.72 (C.35:3-1 et al.). If there is no newspaper published within the local unit, it shall be published in a newspaper having a general circulation in the local unit.
If the clerk fails to have such publication made within 30 days after receipt of the report of audit and recommendations, [he] the clerk shall be subject to a fine of $10[.00] payable to the local unit for each day after the expiration of the 30 days that such publication fails to appear.
(cf: N.J.S.40A:5-7)
20. N.J.S.40A:5-9 is amended to read as follows:
Every audit required under this chapter shall be completed by an accountant or auditor who holds [an uncanceled license] a certificate as a [registered municipal] certified public accountant of New Jersey. [Such] The license shall be issued annually by the New Jersey State Board of Public Accountants, shall be dated September 1 and run until August 31 of the following year, unless sooner canceled or revoked by the said State Board of Public Accountants.
Every report of audit shall be signed by the [registered municipal] certified public accountant making the audit, or in charge thereof, who shall be the person authorized by the local unit to make the audit. In case any license shall be revoked, such revocation shall not be construed to affect any agreement which may be made by any local unit with any other registered municipal accountant, even though such accountant shall have been associated with the person whose license has been revoked.
(cf: N.J.S.40A:5-9)
21. N.J.S.40A:5-10 is amended to read as follows:
Upon proof that any [registered municipal] certified public accountant shall have knowingly omitted to report any error, omission, irregularity, violation of law or discrepancy found in the books or accounts, or shall have issued false reports of the audit of any local unit, or of such a nature as not to comply with the requirements of the director, or if such [registered municipal] certified public accountant shall fail to file such report and recommendations as herein directed, or neglect or refuse to carry out any agreement for audit, [his] the registration license may be canceled by the State Board of [Public Accountants] Accountancy. It shall be the duty of the director to notify the State Board of [Public Accountants] Accountancy of any matters coming to [his] the director's attention relative to any of the foregoing. Upon cancellation or refusal of a license, a person aggrieved thereby shall have the right to a review by the Superior Court in a proceeding in lieu of prerogative writ.
(cf: N.J.S.40A:5-10)
22. Section 15 of P.L.1983, c.313 (C.40A:5A-15) is amended to read as follows:
Notwithstanding the provisions of N.J.S.40A:5-1 et seq., each authority shall cause an annual audit of its accounts to be made, and for this purpose it shall contract with the Division of Local Government Services or employ a [registered municipal accountant of New Jersey or] a certified public accountant of New Jersey. The audit shall be completed and filed with the authority no later than the last day of the eighth month after the close of the fiscal year of the authority. A certified duplicate copy thereof shall be filed with the governing body of each local unit having created the authority and with the director within five days after the original report is filed with the authority. The Local Finance Board shall, by rule or regulation, prescribe the accounting principles and policies, auditing procedures, and financial reporting practices applicable to authorities and authority audits conducted pursuant to this section. The rules and regulations may include or be similar to any provisions of the "Local Fiscal Affairs Law" (N.J.S.40A:5-1 et seq.) which the Local Finance Board shall deem to be practicable or necessary.
(cf: P.L.2025, c.185, s.10)
23. Section 2 of P.L.1993, c.87 (C.40A:9-28.2) is amended to read as follows:
2. a. The director shall hold examinations annually, and at such times as [he] the director may determine appropriate for certification of county finance officers. An applicant for examination shall present to the director written application on forms provided by the Division of Local Government Services, showing that the applicant holds a certified municipal finance officer certificate issued by the Division of Local Government Services pursuant to P.L.1971, c.413 (C.40A:9-140.1 et seq.), or:
(1) is not less than 21 years of age;
(2) is a citizen of the United States;
(3) is of good moral character;
(4) has obtained a certificate or diploma issued after at least four years of study in an approved secondary school or has received an academic education considered and accepted by the [Commissioner of] Secretary of Higher Education of this State as fully equivalent;
(5) has graduated from a four-year course at [a college] an institution of higher education of recognized standing with a major course of study in business administration, accounting or equivalent subject; and
(6) has two years of experience as a county finance officer.
b. An applicant who does not possess the [college] higher education degree required under subsection a. of this section may qualify to take the examination by furnishing proof of four years of full-time experience in a position in a county government as a county finance officer. An applicant who does not possess four years of full-time experience in such a position may substitute one year of [college] higher education for one year of experience, up to a maximum of two years of [college] higher education. For the purpose of this section, one full year of [college] higher education is equal to 30 [college] higher education credits.
c. Every applicant shall furnish proof that [he] the applicant has received certificates indicating satisfactory completion of complete training in the following courses:
(1) municipal finance administration;
(2) municipal current fund accounting I;
(3) municipal current fund accounting II;
(4) municipal capital and trust fund accounting;
(5) municipal budget preparation and control;
(6) county fiscal operations;
(7) principles of financial management; and
(8) preparation of annual financial statements;
all as provided by the Division of Local Government Services or Rutgers, The State University, with the approval of the Division of Local Government Services.
d. Each completed application form shall be accompanied by a fee in the amount of $50, payable to the State Treasurer and shall be filed with the director at least 30 days prior to the date of examination. Examinations shall be written, or both written and oral, and shall be of such character as fairly to test and determine the ability of the person tested to perform the duties of chief financial officer.
e. Upon finding by the director that the applicant has successfully completed the examination, a county finance officer certificate shall be issued to the applicant, upon the payment of a fee of $50 to the order of the Treasurer of the State of New Jersey.
f. Notwithstanding the qualifications established in this section, a county finance officer certificate shall be issued to any person who shall make application as required in this section, pay a fee of $50 to the order of the Treasurer of the State of New Jersey, and:
(1) is licensed as a [registered municipal] certified public accountant in the State of New Jersey and who shall furnish proof that he has received a certificate indicating satisfactory completion or instruction of training courses in principles of financial management, and county fiscal operations, as described herein; or
(2) is a certified municipal finance officer in the State of New Jersey and within one year of the date of enactment of P.L.1993, c.87 (C.40A:9-28.1 et al.) furnishes proof that [he] the applicant has five years of experience as a county finance officer; or
(3) is a certified municipal finance officer in the State of New Jersey and furnishes evidence that [he] the applicant successfully took and passed the examination for such certification as provided under section 2 of P.L.1971, c.413 (C.40A:9-140.2) and that [he] the applicant has received a certificate indicating satisfactory completion of training courses in preparation of annual financial statements, and county fiscal operations as described herein; or
(4) who has been serving as a county finance officer for five years, and who shall make application as required in this section within six months of the effective date of this act, and who shall furnish proof of service as described herein; however, the certificate shall be marked as restricted to the county employing the county finance officer. A county finance officer holding a restricted certificate shall then be subject to all provisions affecting other certificate holders under this act, including, but not limited to renewal and continuing education.
(cf: P.L.1993, c.87, s.2)
24. Section 4 of P.L.1971, c.413 (C.40A:9-140.4) is amended to read as follows:
Notwithstanding the qualifications established in section 2 of this act, a municipal finance officer certificate shall be issued to any person who [is licensed as a registered municipal accountant in the State of New Jersey who] shall make application as required in section 2 of this act, and who shall furnish proof that [he] the applicant has received a certificate indicating satisfactory completion or instruction of a training course in principles of financial management, as provided by the Division of Local Government Services or Rutgers, The State University, with the approval of the Division of Local Government Services of the State, upon payment of a fee of $50 to the order of the Treasurer of the State of New Jersey.
(cf: P.L.1991, c.175, s.4)
25. Section 11 of P.L.1983, c.372 (C.40A:10-46) is amended to read as follows:
The insurance fund commissioners or the executive board thereof, as the case may be, shall cause an annual audit to be conducted by an independent certified public accountant [or a registered municipal accountant] in accordance with the rules and regulations promulgated by the Commissioner of Banking and Insurance pursuant to section 14 of this act. Copies of every audit shall be submitted to the Commissioner of Insurance and the Commissioner of the Department of Community Affairs within 30 working days of its completion.
(cf: P.L.1983, c.372, s.11)
26. (New section) a. The Division of Local Government Services in the Department of Community Affairs shall provide technical assistance and advice as shall be necessary to enable local units to comply with the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill).
b. The Department of Community Affairs, as part of its annual budget request to the Legislature, shall request monies sufficient to provide grants to local units, in a form and manner determined by the department, for reimbursement of costs incurred by a local unit in the implementation of the provisions of P.L. , c. (pending before the Legislature as this bill).
27. The Commissioner of Community Affairs, pursuant to the "Administrative Procedures Act," P.L.1968, c.410 (C.52:14B-1 et.seq.), shall update and adopt rules and regulations as necessary for the implementation of this act.
28. This act shall take effect beginning with the local budget year commencing on or after January 1, 2030 except that the Division of Local Government Services may take advance action as necessary to implement the provisions of this act.
STATEMENT
This bill requires that counties and municipalities adopt generally accepted accounting principles (GAAP) accounting standards. Under N.J.S.18A:4‑14, school districts are required to adhere to these standards. In addition, local authorities and special districts are required to follow GAAP accounting standards under N.J.A.C.5:31‑7.2 and 7.3, respectively. Similarly, the State follows these standards in the preparation of its financial statements.
The bill eliminates the position of registered municipal accountant in favor of a certified public accountant which professionals are trained on GAAP accounting.
The Division of Local Government Services in the Department of Community Affairs is required by the bill to provide technical assistance and advice as shall be necessary to enable local units to comply with the provisions of the bill. The department is also required to, as part of its annual budget request to the Legislature, request monies sufficient to provide grants to local units, in a form and manner determined by the department, for reimbursement of costs incurred by a local unit in the implementation of the provisions of the bill. The bill also makes technical statutory updates.
The bill is to take effect take effect beginning with the local budget year commencing on or after January 1, 2030 except that the Division of Local Government Services may take advance action as necessary to implement the provisions of the bill.
