Dover Blames Deal With West Orange For Its Financial Woes: Report

WEST ORANGE, NJ — An auditor says the financial reports of a Morris County town done under a shared service agreement with West Orange are now in “the worst condition of any records I've ever seen in 27 years.”

Last week, the Dover town council got some gloomy feedback from Nisivoccia, an auditing firm that provides financial services to more than 200 municipalities, the Daily Record reported.

Nisivoccia handled Dover's books for decades before the town chose to make a deal in 2020 with West Orange to provide some of its budget and bookkeeping services.

The shared service agreement between the two towns covered the period from Jan. 1, 2021 to Dec. 31, 2023. The total cost to Dover was $65,000 in the first year, an amount that escalated by 2 percent annually.

However, things didn’t go as smoothly as the towns hoped, auditors say.

According to Nisivoccia, issues included the improper use of $1.8 million in federal COVID relief funds to plug a hole in the 2022 budget, a “lack of records” that were provided to the firm and tardy financial statements.

The firm said the messy records did not involve “misappropriation,” but revolved around “reconciling differences that did not agree with the bank,” the Daily Record reported.

Dover hired a new chief financial officer/treasurer, Thomas Ferry, in September 2023.

Dover Mayor James Dodd referred to the situation in the township as a “financial disaster,” pointing to the shared service agreement as the cause of the trouble and mentioning West Orange’s chief financial officer – John Gross – by name.

Patch reached out to Gross and West Orange township administrators seeking comment about the latest audit in Dover. We will update this article with any reply we receive.

Here are some highlights from the now-expired shared service agreement between West Orange and Dover:

WEST ORANGE TO PROVIDE CFO SERVICES – “The Township [of West Orange] will provide its Certified Municipal Finance Official and Chief Financial Officer to Dover for appointment as the Dover Chief Financial Officer/Treasurer to administer the responsibilities for Dover.”

THE DUTIES – “The work to be performed by the Chief Financial Officer shall include the management of the Finance Department to accomplish the objectives specified in N.J.S.A. 40A:9- 140.10 and Dover Code §2-14 to 15. The Chief Financial Officer will also provide the necessary data, review for accuracy and execute statutory documents prepared by other professionals such as the Annual Finance Statement, Annual Debt Statement, Annual Municipal Budget Document, Annual Audit and others.”

OUTSIDE WORK – “Should Dover request work outside the scope of this agreement from the Chief Financial Officer provided by the Township, Dover shall contract directly with Chief Financial Officer for such work.”

EXCLUSIVITY – “The parties agree this is an exclusive service agreement. The Chief Financial Officer may not provide similar services to municipal entities that are not a part of this Agreement without the express written approval of the parties.”

LIABILITY – “The Township and Dover shall hold each other harmless against claims, demands, liabilities, damages, losses, costs, charges and any and all expenses, (including but not limited to, reasonable attorneys' fees) that either may incur or be subject to as a consequence directly or indirectly of any breach or nonperformance by either party of its obligations under this Agreement or by the willful or negligent act of either party in connection with such performance or nonperformance.”

FINANCIAL AUDIT IN WEST ORANGE

In 2023 – for the fourth straight year – an independent financial audit done in West Orange declared the town’s finances to be “clean.” The analysis covers the year ending Dec. 31, 2022.

The audit listed West Orange as having an “unmodified opinion” and no audit findings. According to a previous statement from the township, an unmodified opinion – or a “clean opinion” – means that the financial statements, as corrected, are fairly presented in conformance with generally accepted accounting principles.

• See Related: Audit Of West Orange Town Finances Is 'Clean,' Officials Say

The analysis didn’t cover the latest budget season in West Orange, which saw heated controversy and many hours of debate in the council chambers.

In 2023, the town saw increases to property taxes on the school, municipal and county levels, a hike to sewer fees and the rollout of several other new municipal charges, as well as an ongoing property tax revaluation.

• See Related: Tax Hike Imminent As West Orange School Budget Hits Finish Line
• See Related: West Orange Council Adopts Town Budget, Tax Hike Approved
• See Related: West Orange Revaluation Begins: Will My Property Taxes Go Up?
• See Related: West Orange Mayor Says 'Perfect Storm' Swirls This Budget Season
• See Related: Sewer Fees Increase In West Orange; Council Gives Green Light
• See Related: West Orange Rolls Out New Fee For Local Businesses
• See Related: West Orange Town Business Admin Resigns Amid Stormy Budget Season

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