NJCPA Applauds Signing of Bill That Will Provide a Better Understanding of New Jersey’s Finances

 – September 13, 2023
NJCPA Applauds Signing of Bill That Will Provide a Better Understanding of New Jersey’s Finances

Statement by Aiysha Johnson, MA, IOM, CEO and Executive Director, New Jersey Society of Certified Public Accountants

The New Jersey Society of CPAs (NJCPA) applauds Lieutenant Governor Tahesha Way for signing S1884/A4090, which requires the state auditor to annually issue a reader-friendly summary of the New Jersey Annual Comprehensive Financial Report (ACFR). Special thanks go to the bill’s primary sponsors, Senators Paul Sarlo and Steve Oroho and Assemblyman Roy Freiman. The legislation was drafted by the NJCPA and the New Jersey Business and Industry Association (NJBIA).

This bill is critically important because it promotes a better understanding of the state’s complete financial picture, including ‘off-budget’ items like long-term liabilities and independent authorities. It goes beyond the annual budget, though the bill does include several budget transparency provisions.

Lawmakers, the media and the public typically focus almost exclusively on the annual budget and overlook New Jersey’s overall financial health, which is covered in great detail in the ACFR. The ACFR contains important items not covered by the annual budget, such as billions of dollars in unfunded liabilities, billions in spending and debt and financial information on the state’s independent authorities.

The ACFR is so long — over 400 pages — and filled with technical accounting jargon, making it difficult for a layperson to follow. Many people, including lawmakers and the media, do not even know that it exists.

This bill, which is effective immediately, requires the state auditor to annually release a brief, user-friendly report on the ACFR, which will allow lawmakers, the media and the public to become more aware of the state’s true financial condition. This summary will also include per capita comparative statistics from mid-Atlantic and northeast states. Furthermore, it would require the state auditor, at the beginning of the annual budget process, to appear before the Senate and Assembly budget committees to testify on the ACFR report.

This new law will play a critically important role in educating everyone on the state’s complete financial state, which will bring more transparency and provide for better policy making.