The Hoboken Municipal FY2007 (July 1, 2006 to June 30, 2007) Budget Audit was prepared by Garbarini & Co. CPA's, a registered municipal accountant, based in Carlstadt, New Jersey and distributed to the City Council members in January, 2008.

Within sixty days of the City Council's formal acceptance of the audit, the Roberts Administration is required to provide a corrective action plan that addresses the deficiencies found in the audit. As of this date, February 29, 2008, the Hoboken City Council has not passed a resolution accepting the audit.

Prior to the official release of the report, the Roberts Administration acted decisively when the auditing firm alerted the City that there were serious problems with the handling of parking meter cash revenues by the contracted vendor, UNITED TEXTILE FABRICATORS, Toms River, New Jersey.

BACKGROUND:

Universal Textile Fabricators was awarded three "no bid" contracts in November, 2005.  The first contract was for the physical "collecting" of quarters from the City's parking meters. The second contract was for "coin counting" and the third contract was for the repair parking meters.


FINDINGS:

The auditors report that the contracts were in violation of Local Public Contract Law, expenditures exceeded the bidding threshold and were not advertised for bids (See Comment #6: Violation of Local Public Contract Law).

Parking meter CASH revenue collections for fiscal year 2007 were $660,894, compared to $991,316 for fiscal year 2006, representing in a decrease of $330,422, or 33%.

Meter collections had decreased dramatically during their [ United Textile Fabricators ] contract term.

The City of Hoboken, "the City", has estimated that the amount receivable from United Textile Fabricators is undetermined at this time.


CORRECTIVE ACTION:

Prior to the auditors alert, United Textile Fabricators had collected and taken the coins (parking meter revenue) to their place of business in Toms River, NJ. The coins were counted and the funds deposited into the account of United Textile Fabricators.

In November of 2007, the City changed the method previously used to deposit parking meter cash revenue. The vendor now collects from the meters and deposit directly into a depository in the name of the City of Hoboken Parking Utility.

On December 4, 2007, the Roberts Administration engaged Garbarini & Co. P.C. CPA's to apply agreed-upon procedures to the books and records of United Textile Fabricators to determine the correct receivable of meter collections not turned over to the City. A separate report will be issued at the completion of the agreed upon procedures.


CITY COUNCIL DEBATES PROBLEM:

(-UPDATED: 03/05/2008 -click on the Video-)

The Hoboken Business Administrator will provide a complete report to the City Council upon completion of the United Textile Fabricators audit.

I am requesting that the City Council  and members of the public insist on answers to the following questions.

The release of the United Textiles Fabricators background investigation relied upon by the City as a prerequisite to entrusting millions of dollars of TAXPAYER’s CASH revenue. This should include information on the principles of United Textile Fabricators and the company’s background.

What was the method agreed upon by the City and United Textile Fabricators to fairly determine the amount owed to the City of Hoboken?

Are coins still being transported to the company’s Toms River, New Jersey business site? And if so, what safeguards are in effect to assure the citizens that all of the money is deposited into the City’s account?

Are the principles of the Company willing to appear at a City Council Meeting to address the concerns of the City Council and citizens?

Is United Textile Fabricators bonded? If so, what is the amount?

Excerpts from the FY2007 AUDIT FINDINGS:
Audit Page 22, PDF Page 51

14. Parking Utility Fund
"The City contracted with United Textile Fabricators for coin collection services and deposit of the City's monies for 2006 and on a month-to-month basis for 2007. Collections for fiscal year 2007 were $660,894, compared to $991,316 for fiscal year 2006, representing in a decrease of $330,422, or 33%.


COMMENTS AND RECOMMENDATIONS
Audit Page 42, PDF Page 129

Comment #6: Violation of Local Public Contract Law

Our examination of expenditures indicated instances where five vendors exceeded the bidding threshold and were not advertised for bids;
1. Janitorial supplies
2. Skate park ramps
3. Plumbing
4. Parking utility meter collections & maintenance
5. Parking utility garage operations

N.J.S.A. 40A:11-4 states "Every contract awarded by the contracting agents, for the provision or performance of any goods or services, the cost of which in the aggregate exceed the bid threshold [40A:11-3 "a contract year the total sum of $ 21,000…If the purchasing agent is qualified pursuant to subsection b. of section 9 of P.L.1971, c.198 (C.40A:11-9), the governing body of the contracting unit may establish that the bid threshold may be up to $29,000."], shall be awarded only by resolution of the governing body of the contracting unit to the lowest responsible bidder after public advertising for bids and bidding therefore, except as is provided otherwise in this act or specifically by any other law." The City should monitor or estimate contracts that will require advertisement and bidding under N.J.S.A. 40A:11-4 and Local Public Contracts Law.


Audit Page 43, PDF Page 130
Comment #8: Parking Utility Meter Collection

In December of 2005, the Parking Utility contracted with United Textile Fabricators for meter collection and maintenance. Meter collections had decreased dramatically during their contract term. The City of Hoboken, "the City", has estimated that the amount receivable from United Textile Fabricators is undetermined at this time. The contract with the United Textile has expired and they are now on a month to month basis.

In November of 2007, the City amended the procedures to be followed by United Textile Fabricators. The vendor now collects from the meters and deposit directly into a depository in the name of the City of Hoboken Parking Utility. United Textile Fabricators had been previously taking the coins to their place of business in Toms River, NJ and depositing the funds in their accounts. There has been subsequent collections from July 1, 2007 through the date of our audit of amounts due from prior periods.

On December 4, 2007, the City engaged Garbarini & Co. P.C. CPA's to apply agreed-upon procedures to the books and records of United Textile Fabricators to determine the correct receivable of meter collections not turned over to the City. A separate report will be issued at the completion of the agreed upon procedures.

2007 FY2007 Hoboken Municipal Budget Audit