Bowman's close relationship with Camden criticized in 2008 NJ Comptroller report
Some of Camden's $49 million balance in grant money isn’t being used because city officials can’t tell if it is real money or a bookkeeping error. For the last two years, auditing firm Bowman & Company LLP, which has audited Camden's books for at least 15 years, has given Camden an “unqualified” audit opinion, meaning no serious issues were found in Camden's books. But would a different auditing firm have the same finding? A 2008 New Jersey State Comptroller Office report indicates that such close relationships between auditing company and its government client, especially when political contributions are involved, is not the best set-up to fulfill the mission of financial oversight. Here is a look at why...
As I reported in my story in today's Inquirer, Camden has a balance of $49 million in grant money, some of which isn't being used because city officials can't tell if it is real money or a bookkeeping error.
The auditing firm, Bowman & Company LLP, which has been auditing the city's books for at least 15 years, has almost always mentioned the city's "aged receivable balances," as an issue. Yet, the city has not been able to resolve the problem.
For the last two years, Bowman has given Camden an "unqualified" audit opinion, meaning no serious issues were found. But would a different auditing firm have the same finding?
Maybe. But maybe not, according to a 2008 New Jersey State Comptroller Office report on the use of auditing firms.
The state comptroller's report recommended that legislation be enacted imposing a 10-year time limit on on auditing firms working with the same governmental agencies.
"The fact that New Jersey government entities are not employing suggested practices in the area of auditor rotation raises the question of whether these external auditing firms are capably fulfilling their mission of financial oversight," the report states.
The recommendation was partly based on a review that found that the longer a school district's audit firm held the engagement, the greater the disparity between the state-contracted auditor and the district audit's firm's results.
Comptroller office spokesman Peter Mcaleer said the office suggests municipalities and other government agencies use a competitive selection process at least every five years and don't use the same auditing firm for more than 10 years.
But because the legislature has not acted on the 2008 recommendation and no such law has been passed, "it's not something we can mandate," Mcaleer said.
The comptroller's office also recommended that government entities should not hire any audit firm that has made political contributions on a local or state level in the year preceding the audit engagement. The report lists Bowman & Company as having the highest number of clients in the state - 98- and also being the top donor to political groups and candidates. The company and its employees donated $494,800 in 2006 and 2007, according to the comptroller's 2008 report.
Even since the report was issued, Bowman's employees have continued to give money to political candidates in jurisdictions where they perform auditing services.
For example, Bowman auditor Jarred Corn, who signed off on Camden's most recent audit, has donated nearly $3,000 to Camden County Democrats since 2008. He also donated $1,000 to the state Democratic Assembly Campaign Committee in 2008. More recently, in February, Corn gave $150 to the Angel Fuentes 2013 primary campaign for State Assembly.
Corn did not return calls for comment on Camden's audits.
A review of the Election Law Enforcement Commission's database shows that several of Corn's colleagues at Bowman have also donated thousands of dollars to Camden County candidates in the last two years.
Bowman will soon start going over the city's 2013 books and again analyze the more than 200 grants. They will be paid $186,000 for the contact.