HomeMy Public PortalAboutCarteret Port Authority Audit 2020DRA
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BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret,
County of Middlesex, State of New Jersey)
Financial Statements and Supplementary Schedules
For the year ended December 31, 2020
(With Independent Auditor’s Report thereon)
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BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Financial Statements and Supplementary Schedules
For the year ended December 31, 2020
CONTENTS
Page
Independent Auditor’s Report 1-3
Independent Auditor’s Report on Internal Control Over Financial
Reporting and on Compliance and Other Matters Based on and Audit
of Financial Statements Performed in Accordance
with Government Auditing Standards 5-6
Management’s Discussion and Analysis 7-9
Statement of Net Position 11
Statement of Revenues, Expenses and Change in Net Position 12
Statement of Cash Flows 13
Notes to Financial Statements 15-26
Required Supplementary Information:
Schedule I – Schedule of Authority’s Proportionate Share
of the Net Pension Liability – PERS 27
Schedule II – Schedule of Authority Contributions – PERS 28
Notes to the Required Supplemental Information 29
Other Supplementary Information:
Schedule III – Schedule of Revenues and Costs Compared to Budget 31
Schedule IV – Schedule of Revenues, Expenses and Changes in
Unrestricted and Restricted Net Position 32
Schedule V – Schedule of Unrestricted Cash Receipts, Cash
Disbursements and Changes in Cash 33
Board of Commissioners 34
General Comments and Recommendations 35-36
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INDEPENDENT AUDITOR’S REPORT
To the Chairman and Commissioners
of the Borough of Carteret Municipal Port Authority
Report on the Financial Statements
We have audited the accompanying financial statements of the business-type activities of the Borough of
Carteret Municipal Port Authority, a component unit of the Borough of Carteret, County of Middlesex, State
of New Jersey, as of and for the year ended December 31, 2020 and the related notes to the financial
statements, which collectively comprise the Authority’s basic financial statements as listed in the table of
contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audits. We conducted
our audits in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards,issued by the
Comptroller General of the United States; and in compliance with audit standards prescribed by the Local
Finance Board and by the Division of Local Government Services, Department of Community Affairs, State
of New Jersey. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. Accordingly, we express no such opinion.An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Opinion
In our opinion,the financial statements referred to above present fairly, in all material respects, the
respective financial position of the business-type activities of the Borough of Carteret Municipal Port
Authority, a component unit of the Borough of Carteret, County of Middlesex, State of New Jersey as of
December 31, 2020 and the respective changes in financial position and cash flows thereof for the year then
ended in accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis and the schedules related to accounting and reporting for pensions be presented to
supplement the basic financial statements. Such information, although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board who considers it to be an
essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United States
of America, which consisted of inquiries of management about the methods of preparing the information
and comparing the information for consistency with management’s responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion or provide any assurance on the information because the limited procedures
do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Borough of Carteret Municipal Port Authority’s basic financial statements. The schedule of
revenues and costs compared to budget, schedule of revenues, expenses and changes in unrestricted and
restricted net position and the schedule of unrestricted cash receipts, cash disbursements and changes in
cash are presented for purposes of additional analysis, and are not a required part of the basic financial
statements.
The accompanying schedule of revenues and costs compared to budget, schedule of revenues, expenses
and changes in unrestricted and restricted net position and the schedule of unrestricted cash receipts, cash
disbursements and changes in cash are the responsibility of management and were derived from and
relates directly to the underlying accounting and other records used to prepare the basic financial
statements such information has been subjected to the auditing procedures applied in the audit of the basic
financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic financial
statements or to the basic financial statements themselves, and other additional procedures in accordance
with auditing standards generally accepted in the United States of America. In our opinion, the schedule
of revenues and costs compared to budget, schedule of revenues, expenses and changes in unrestricted
and restricted net position and the schedule of unrestricted cash receipts, cash disbursements and changes
in cash are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
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Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated August 6, 2021
on our consideration of the Borough of Carteret Municipal Port Authority’s internal control over financial
reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and
grant agreements and other matters. The purpose of that report is to describe the scope of our testing of
internal control over financial reporting and compliance and the results of that testing, and not to provide
an opinion on internal control over financial reporting or on compliance.That report is an integral part of
an audit performed in accordance with Government Auditing Standards in considering Borough of
Carteret Municipal Port Authority’s internal control over financial reporting and compliance.
HOLMAN FRENIA ALLISON, P.C.
Certified Public Accountants
August 6, 2021
Lakewood, New Jersey
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INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT
OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS
To the Chairman and Commissioners
of Borough of Carteret Municipal Port Authority
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States and audit requirements as prescribed by Local
Finance Board and by the Division of Local Government Services, Department of Community Affairs,
State of New Jersey, the financial statements of the business-type activities of the Borough of Carteret
Municipal Port Authority as of and for the year ended December 31, 2020, and the related notes to the
financial statements, which collectively comprise the Borough of Carteret Municipal Port Authority’s
basic financial statements and have issued our report thereon dated August 6, 2021.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Borough of Carteret
Municipal Port Authority's internal control over financial reporting (internal control) to determine the
audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on
the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Borough
of Carteret Municipal Port Authority’s internal control. Accordingly, we do not express an opinion on the
effectiveness of Borough of Carteret Municipal Port Authority’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement
of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A
significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less
severe than a material weakness, yet important enough to merit attention by those charged with
governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may
exist that were not identified. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses
may exist that have not been identified.
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Compliance and Other Matters
As part of obtaining reasonable assurance about whether Borough of Carteret Municipal Port Authority’s
financial statements are free of material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a
direct and material effect on the determination of financial statement amounts. However, providing an
opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do
not express such an opinion. The results of our tests disclosed no instances of noncompliance or other
matters that are required to be reported under Government Auditing Standards or audit requirements as
prescribed by the Local Finance Board and by the Division of Local Government Services, Department of
Community Affairs, and State of New Jersey.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the Authority’s
internal control or on compliance. This report is an integral part of an audit performed in accordance with
Government Audit Standards and audit requirements as prescribed by the Local Finance Board and by the
Division of Local Government Services, Department of Community Affairs, and State of New Jersey in
considering the entity’s internal control and compliance. Accordingly, this communication is not suitable
for any other purpose.
HOLMAN FRENIA ALLISON, P.C.
Certified Public Accountants
August 6, 2021
Lakewood, New Jersey
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BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A COMPONENT UNIT OF THE BOROUGH OF CARTERET,
COUNTY OF MIDDLESEX, STATE OF NEW JERSEY)
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED December 31, 2020
As management of Borough of Carteret Municipal Port Authority (the “Authority”), we offer readers of the
Authority’s financial statements this narrative overview and analysis of the financial activities of the Authority for
the year ended December 31, 2020. The intent of this narrative is to look at Authority’s overall financial
performance in terms easily understood by the lay person. Please read this in conjunction with the Authority’s
financial statements which begin on page 11. Notes to the financial statements will provide the reader with
additional useful information and they begin on page 15.
FINANCIAL HIGHLIGHTS
The assets of the Authority exceeded its liabilities at December 31, 2020 by $2,253,280. In 2019 the
excess of liabilities over assets was $1,524,543.
During 2020 the Authority operated at a surplus of $728,737. In 2019 the Authority operated at a surplus
of $527,116.
The Authority increased their liabilities by $8,129 in 2020, and increased their total assets by $736,866.
OVERVIEW OF THE FINANCIAL STATEMENTS
The Authority’s basic financial statements are comprised of two components: Authority financial statements and
notes to the basic financial statements.
Reporting on the Authority as a Whole
The Authority is a self-supporting entity and follows enterprise fund reporting. The Authority’s financial
statements are presented using the economic resources measurement focus and the accrual basis of accounting in
accordance with generally accepted accounting principles as promulgated by GASB. Enterprise fund statements
reflect short-term and long-term financial information about the activities and operations of the Authority. These
statements are presented in a manner similar to a private business. While detailed subfund information is not
presented, separate accounts are maintained for each program and certain restricted funds or accounts have been
established as required by bond resolutions and agreements. See the notes to the financial statements for summary
of the Authority’s significant accounting policies.
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FINANCIAL ANALYSIS
Authority’s net position is a useful indicator of the Authority’s financial condition. At the end of 2020, the
Authority’s assets exceeded its liabilities by $2,253,280.
Statement of Net Position
At the end of 2020 the net position of the Authority increased $728,737 as a result of the increase in Binocular
fees and Dock Rental Fees collected in the current year and the inflow from the Local Subsidy.
Statement of Revenues, Expenses and Changes in Net Position
The Statement of Revenue, Expenses and Changes in Net Position shows the cost of the operations and the
revenues offsetting these costs. A summary of these activities follows:
2020 2019 $ Change % Change
Total assets and deferred
outflows of resources 2,276,106$ 1,539,240$ 736,866 47.9%
Total liabilites and deferred
inflows of resources (22,826) (14,697) (8,129) 55.3%
Net position 2,253,280$ 1,524,543$ 728,737 47.8%
Unrestricted 2,253,280$ 1,524,543$ 728,737 47.8%
Total net position 2,253,280$ 1,524,543$ 728,737 47.8%
2020-2019
Revenue 2020 2019 $ Change % Change
Operating revenues
Local subsidy 500,000$ 500,000$ - 0.0%
Bincoular fees and Rental 288,663 112,353 176,310 156.9%
Other operating revenue - 698 (698) -100.0%
Total operating revenues 788,663$ 613,051$ 175,612 28.6%
Expenses
Operating expenses
Administrative expenses 41,260$ 55,750$ (14,490) -26.0%
Cost of Operations
and maintenance 33,019 48,202 (15,183) 100.0%
Total operating expenses 74,279 103,952 (29,673) -28.5%
Non-operating revenue
Interest income 14,353 18,017 (3,664) -20.3%
Total non-operating revenue 14,353 18,017 (3,664) -20.3%
Increase (decrease) in net position 728,737 527,116 201,621 38.2%
Net Position, January 1 1,524,543 997,427 527,116 52.8%
Net Position, Dec. 31 2,253,280$ 1,524,543$ 728,737 47.8%
2020-2019
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Local Subsidy constituted 63% of the total governmental activities revenues received by Authority in 2020. In
2019 the local subsidy constituted 82% of total revenues. The Binocular fees and Dock Rental Fees constituted
for 37% in 2020. In 2019 the Binocular Fees and Rentals constituted 18%.
The Cost of Operations was 44% of the Authority’s total expenses in 2020. In 2019, this cost represented 46% of
the total expenses. Administration expenses equaled 56% of the total expenses in 2020. In 2019, this cost
constituted 54% of total operating expenses.
Budgetary Highlights
The Authority had total actual revenues in excess of budgeted revenues of $303,016 in 2020. The Board
anticipates in 2021 that actual revenues will exceed the budgeted revenues.
The Authority spent $424,211 less than originally anticipated in the operating budget for 2020.
ECONOMIC FACTORS AND NEXT YEARS BUDGET
In 2020, the Authority was able to cover all its appropriations through the local subsidy and other revenues
generated from the operations of the Authority. In 2020 the local subsidy amounted to 63% of total operating
revenue collected and revenues from activities constituted 37%. Comparatively, in 2019 the local subsidy
represented 82% of the total operating revenue and revenues from the Authority’s activities constituted 18%.
Authority adopted their 2020 budget on February 11, 2020.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the Authority’s finances for all of those with an
interest in the Authority’s finances. Questions concerning any of the information provided in this report, or
requests for additional financial information should be addressed to the Treasurer of the Borough of Carteret
Municipal Port Authority, 61 Cooke Avenue, Carteret, New Jersey, 07008.
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2020
ASSETS
Current assets:
Unrestricted assets:
Cash and cash equivalents (Note 3)2,274,220$
Prepaid expenses 1,500
Total current unrestricted assets 2,275,720
Total assets 2,275,720
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows related to pensions (Note 5)386
Total deferred outflow of resources 386
Total assets and deferred outflow of resources 2,276,106$
LIABILITIES
Current liabilities paid from unrestricted assets:
Accounts payable 11,013$
Total current liabilities paid from unrestricted assets 11,013
Non-current unrestricted liabilities:
Net pension liability (Note 5)4,517
Total non-current unrestricted liabilities 4,517
Total liabilities 15,530
DEFERRED INFLOWS OF RESOURCES
Deferred inflows related to pensions (Note 5)7,296
Total deferred inflow of resources 7,296
Total liabilities and deferred inflow of resources 22,826
NET POSITION
Unrestricted net position:
Renewal and replacement reserve 1,500,000
Unreserved 753,280
Total net position 2,253,280
Total liabilities, deferred inflow of resources and net position 2,276,106$
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Statement of Net Position
December 31, 2020
The accompanying notes to the financial statements are an integral part of this statement.
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2020
Operating revenues:
Binocular fees and rentals 288,663$
Local subsidy 500,000
Total operating revenues 788,663
Operating expenses:
Administration 41,260
Cost of Providing Services 33,019
Total operating expenses 74,279
Net income from operations 714,384
Non-operating revenues:
Interest income 14,353
Total non-operating revenues 14,353
Change in net position 728,737
Net position, January 1 1,524,543
Net position, December 31 2,253,280$
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Statement of Revenues, Expenses and Change in Net Position
For the year ended December 31, 2020
The accompanying notes to the financial statements are an integral part of this statement.
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2020
Cash flows from operating activities:
Cash received from service users 288,663$
Cash received from local subsidy 500,000
Cash paid to suppliers and employees (65,324)
Net cash flows from operating activities 723,339
Cash flows from investing activities:
Interest received 14,353
Net cash flows from investing activities 14,353
Change in cash 737,692
Cash and cash equivalents, January 1 1,536,528
Cash and cash equivalents, December 31 2,274,220$
Reconciliation of net income to cash flows
from operating activities:
Net change from operations 714,384
Working capital changes which provided (used) cash:
Accounts payable 11,013
Pension payable (548)
Deferred outflow of resources 826
Net pension liability (5,634)
Deferred inflows related to pension 3,298
Net cash flows from operating activities 723,339$
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Statement of Cash Flows
For the year ended December 31, 2020
The accompanying notes to the financial statements are an integral part of this statement.
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BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to Financial Statements
For the year ended December 31, 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements have been prepared in conformity with generally accepted accounting
principles as prescribed by the Governmental Accounting Standards Board (GASB).
Reporting Entity
The Borough of Carteret Municipal Port Authority (the “Authority”), was created by Ordinance of the Borough
of Carteret (the “Borough”) on September 4, 2003. The purpose of the Authority is to exercise all of the powers
and privileges granted by the Port Authority Law of New Jersey (N.J.S.A. 40:68A et seq) and to thereby
advance the interests of the residents of the Borough of Carteret by developing, operating, maintaining and
expanding all lawful activities pertaining to the waterfront throughout the Borough on properties owned or
otherwise controlled by the Authority now or in the future. The Authority is governed by five Members and one
alternate member, all in accordance with the statute and the terms of the enabling Ordinance. The Members
have the authority to exercise all of the powers and privileges provided under the law. The powers include the
ability to sue or be sued in its corporate name, the power to establish and collect rates, rentals and other charges,
the authority to acquire, construct, operate, manage and maintain facilities, the authority to buy and sell real and
personal property, and the authority to issue debt for acquiring or constructing any facility or permanent
improvement.
The primary criterion for including activities with the Authority’s reporting entity, as set forth in Section 2100 of
the GASB Codification of Governmental Accounting and Financial Reporting Standards, is whether:
the organization is legally separate (can sue or be sued in their own name);
the Authority holds the corporate powers of the organization;
the Authority appoints a voting majority of the organization’s board
the Authority is able to impose its will on the organization;
the organization has the potential to impose a financial benefit/burden on the Authority
there is a fiscal dependency by the organization on the Authority.
There were no additional entities required to be included in the reporting entity under the criteria as described
above.
The Authority is a component unit of the Borough. The Authority issues separate financial statements from the
Borough. However, if the Borough presented its financial statements in accordance with GAAP, these financial
statements would be included in the Borough’s on a blended basis.
General
The Authority currently operates binocular rentals located on Borough owned property along with a marina on
the waterfront. In 2014, the Authority rebuilt the miniature golf course which was destroyed by Superstorm
Sandy in 2012. As a public body, under existing statute, the Authority is exempt from both federal and state
taxes.
Basis of Accounting
The financial statements of the Authority have been prepared on the accrual basis of accounting and in
accordance with generally accepted accounting principles (“GAAP”) applicable to enterprise funds of
state and local governments.
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BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to Financial Statements
For the year ended December 31, 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Basis of Accounting (continued)
All activities of the Authority are accounted for within a single proprietary (enterprise) fund. Proprietary
funds are used to account for operations that are (a) financed and operated in a manner similar to private
business enterprise where the intent of the governing body is that the cost (expenses, including depreciation)
of providing goods or services to the general public on a continuing basis be financed or recovered primarily
through user charges; or (b) where the governing body has decided that periodic determination of revenues
earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy,
management control, accountability, or other purposes.
The accounting and financial reporting treatment applied to the Authority is determined by its measurement
focus. The transactions of the Authority are accounted for on a flow of economic resources measurement
focus. With this measurement focus, all assets, liabilities and deferred inflow or outflow of resources
associated with the operations are included on the statement of net position. Net position (i.e., total assets net
of total liabilities) are segregated into invested in capital assets, net of related debt and unrestricted
components.
Use of Estimates
The process of preparing financial statements in conformity with generally accepted accounting principles
requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues and
expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the financial
statements. Accordingly, upon settlement, actual results may differ from estimated amount.
Cash and Cash Equivalents
New Jersey Authorities are required by N.J.S.A. 40A:5-14 to deposit public funds in a bank or trust company
having its place of business in the State of New Jersey and organized under the laws of the United States of
America or State of New Jersey or the New Jersey Cash Management Fund. N.J.S.A. 40A:5-15.1 provides a list
of securities which may be purchased by New Jersey Authorities. The Authority is required to deposit funds in
public depositories protected from loss under the provisions of the Governmental Unit Deposit Protection Act
(“GUDPA”). GUDPA was enacted in 1970 to protect governmental units from a loss of funds on deposit with a
failed banking institution in New Jersey. N.J.S.A. 17:9-42 requires governmental units to deposit public funds
only in public depositories located in New Jersey, when the funds are secured in accordance with the Act.
For the statements of cash flows, the Authority combines the unrestricted cash and cash equivalents with the
restricted cash and cash equivalents. The Authority considers investments with maturities of three months or
less at the time of purchase to be cash equivalents.
Capital Expenditures
The Authority has authorized expenditures for the development of the waterfront on Borough owned properties.
The Authority has treated these expenditures as a contribution to the Borough and therefore has not capitalized
them on their books and records.
Compensated Absences
Authority employees are not entitled to compensated absences for unused vacation, holiday and sick time.
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BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to Financial Statements
For the year ended December 31, 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Operating Revenues and Expenses
The Authority recognizes revenue on the accrual basis earned.
The Authority classifies all fees and charges to provide services as operating revenue and all other income as
nonoperating revenue.
Equity Classifications
Equity is classified as net position and can be displayed in three components as follows:
Net Investment in capital assets – Consists of capital assets including restricted capital assets, net of
accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other
borrowings that are attributable to the acquisition, construction or improvement of those assets.
Restricted net position – Consists of net position with constraints placed on use either by (1) external groups
such as creditors, grantors, contributors, laws or regulations of other governments; or (2) law through
constitutional provisions or enabling legislation.
Unrestricted net position – All other net position that do not meet the definition of "restricted" or “net
investment in capital assets".
Budgets and Budgetary Accounting
Each year the Authority adopts a budget which is approved by the State of New Jersey, Department of
Community Affairs, Division of Local Government Services. The budget may be amended by resolution of
the Board of Commissioners of the Authority. The budgetary basis of accounting is utilized to determine if
the Authority has sufficient cash to operate. As such, certain items such depreciation expense is not included
in budgetary expenses.
Deferred Outflows and Deferred Inflows of Resources
In addition to assets, the statement of net position will sometimes report a separate section for deferred
outflows of resources. This separate financial statement element, deferred outflows of resources, represents a
consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of
resources (expense/expenditure) until then.
In addition to liabilities, the statement of net position will sometimes report a separate section for deferred
inflows of resources. This separate financial statement element, deferred inflows of resources, represents an
acquisition of net position that applies to future periods and so will not be recognized as an inflow of
resources (revenue) until that time.
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BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to Financial Statements
For the year ended December 31, 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Pensions Section
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of
resources related to pensions, and pension expense, information about the pension plan’s fiduciary net
position and additions to/deductions from the plan’s fiduciary net position have been determined on the same
basis as they are reported by the plan. For this purpose, benefit payments (including refunds of employee
contributions) are recognized when due and payable in accordance with the benefit terms. Investments are
reported at fair value.
Impact of Recently Issued Accounting Principles
Recently Issued Accounting Pronouncements Adopted in the Current Year
Statement No. 95, Postponement of The Effective Dates of Certain Authoritative Guidance, provides
temporary relief to governments and other stakeholders in light of the COVID-19 pandemic. This Statement
was issued to postpone the effective dates of GASB statements and certain provisions in Statements and
Implementation Guides that first became effective or are scheduled to become effective for periods beginning
after June 15, 2018, and later. The postponement does not affect the Authority’s operations.
Recently Issued Accounting Pronouncements Not Yet Adopted
The GASB has issued the following Statements which will become effective in future fiscal years as shown
below:
Statement No. 87, Leases. The objective of this Statement is to better meet the information needs of financial
statement users by improving accounting and financial reporting for leases by governments. This Statement
increases the usefulness of governments' financial statements by requiring recognition of certain lease assets
and liabilities for leases that previously were classified as operating leases and recognized as inflows of
resources or outflows of resources based on the payment provisions of the contract. As a result of Statement
No. 95, Postponement of The Effective Dates of Certain Authoritative Guidance, Statement No. 87 is now
effective for reporting periods beginning after June 15, 2021. Management has not yet determined the impact
of this Statement on the financial statements.
Statement No. 89, Accounting for Interest Cost Incurred Before the End of a Construction Period. The
objectives of this Statement are (1) to enhance the relevance and comparability of information about capital
assets and the cost of borrowing for a reporting period and (2) to simplify accounting for interest cost incurred
before the end of a construction period. As a result of Statement No. 95, Postponement of The Effective Dates
of Certain Authoritative Guidance, Statement No. 87 is now effective for reporting periods beginning after
June 15, 2021. Management has not yet determined the impact of this Statement on the financial statements.
Subsequent Events
The Authority has evaluated subsequent events occurring after December 31, 2020 through August 6, 2021,
which is the date the financial statements were available to be issued.
18
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BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to Financial Statements
For the year ended December 31, 2020
NOTE 2: DONATED MATERIALS AND SERVICES
The Authority does not pay rent to the Borough for the use of the Borough’s property. The Borough may
provide other services in the form of meeting space, administration, use of office equipment and supplies. The
Borough may also engage in similar activities associated with the Authority’s purpose. The monetary value of
these donated materials and services has not been established.
NOTE 3: CASH AND CASH EQUIVALENTS
The Authority is governed by the deposit limitations of New Jersey state law. The deposits held at December
31, 2020 reported at fair value are as follows:
Carrying
Value
2020
Type:
Deposits:
Demand deposits $2,274,220
Total deposits $2,274,220
Reconciliation to Statements of Net Position:
Current unrestricted assets:
Cash and cash equivalents $2,274,220
Total cash and cash equivalents $2,274,220
Custodial Credit Risk
Custodial credit risk is the risk that, in the event of a bank failure, the Authority’s deposits may not be
returned. The Authority does not have a deposit policy for custodial credit risk. As of December 31, 2020,
the Authority’s bank balance of $2,274,976 was insured or collateralized as follows:
Insured 750,000$
GUDPA 1,524,976
Total Deposits 2,274,976$
NOTE: 4: OPERATING LEASE
The Authority leases three coin-operated binoculars for $500 each, annually. The Authority is not obligated to
any future payments and can cancel at any time.
19
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BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to Financial Statements
For the year ended December 31, 2020
NOTE 5: PENSION OBLIGATIONS
Public Employees’ Retirement System (PERS)
Plan Description - The State of New Jersey, Public Employees' Retirement System (PERS) is a cost-sharing
multiple-employer defined benefit pension plan administered by the State of New Jersey, Division of
Pensions and Benefits (the Division). For additional information about PERS, please refer to Division's
Comprehensive Annual Financial Report (CAFR), which can be found at
http://www.nj.gov/treasury/pensions/financial-reports.shtml.
The vesting and benefit provisions are set by N.J.S.A. 43:15A. PERS provides retirement, death and disability
benefits. All benefits vest after ten years of service.
The following represents the membership tiers for PERS:
Tier Definition
1 Members who were enrolled prior to July 1, 2007
2 Members who were eligible to enroll on or after July 1, 2007 and prior to November 2, 2008
3 Members who were eligible to enroll on or after November 2, 2008 and prior to May 22, 2010
4 Members who were eligible to enroll on or after May 22, 2010 and prior to June 28, 2011
5 Members who were eligible to enroll on or after June 28, 2011
Service retirement benefits of 1/55th of final average salary for each year of service credit is available to tiers
1 and 2 members upon reaching age 60 and to tier 3 members upon reaching age 62. Service retirement
benefits of 1/60th of final average salary for each year of service credit is available to tier 4 members upon
reaching age 62 and tier 5 members upon reaching age 65.
Early retirement benefits are available to tiers 1 and 2 members before reaching age 60, tiers 3 and 4 with 25
or more years of service credit before age 62 and tier 5 with 30 or more years of service credit before age 65.
Benefits are reduced by a fraction of a percent for each month that a member retires prior to the age at which
a member can receive full early retirement benefits in accordance with their respective tier. Tier 1 members
can receive an unreduced benefit from age 55 to age 60 if they have at least 25 years of service. Deferred
retirement is available to members who have at least 10 years of service credit and have not reached the
service retirement age for the respective tier.
Basis of Presentation – The schedules of employer allocations and the schedules of pension amounts by
employer (collectively, the Schedules) present amounts that are considered elements of the financial
statements of PERS or its participating employers. Accordingly, they do not purport to be a complete
presentation of the financial position or changes in financial position of PERS or the participating employers.
The accompanying Schedules were prepared in accordance with U.S. generally accepted accounting
principles. Such preparation requires management of PERS to make a number of estimates and assumptions
relating to the reported amounts. Due to the inherent nature of these estimates, actual results could differ from
those estimates.
Contributions – The contribution policy for PERS is set by N.J.S.A. 43:15A and requires contributions by
active members and contributing employers. State legislation has modified the amount that is contributed by
the State. The State's pension contribution is based on an actuarially determined amount, which includes the
20
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BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to Financial Statements
For the year ended December 31, 2020
NOTE 5: PENSION OBLIGATIONS (continued)
Public Employees’ Retirement System (PERS) (continued)
employer portion of the normal cost and an amortization of the unfunded accrued liability. Funding for
noncontributory group insurance benefits is based on actual claims paid. For the fiscal year 2020, the State's
pension contribution was less than the actuarial determined amount. The local employers' contribution
amounts are based on an actuarially determined rate, which includes the normal cost and unfunded accrued
liability. Chapter 19, P.L. 2009 provided an option for local employers of PERS to contribute 50% of the
normal and accrued liability contribution amounts certified for payments due in State fiscal year 2009. Such
employers will be credited with the full payment and any such amounts will not be included in their unfunded
liability. The actuaries will determine the unfunded liability of those retirement systems, by employer, for the
reduced normal and accrued liability contributions provided under this law. This unfunded liability will be
paid by the employer in level annual payments over a period of 15 years beginning with the payments due in
the fiscal year ended June 30, 2012 and will be adjusted by the rate of return on the actuarial value of assets.
For the year ended December 31, 2020, the Authority’s contractually required contribution to PERS plan was
$303.
Components of Net Pension Liability – At December 31, 2020, the Authority’s proportionate share of the
PERS net pension liability was $4,517. The net pension liability was measured as of June 30, 2020. The total
pension liability used to calculate the net pension liability was determined using update procedures to roll
forward the total pension liability from an actuarial valuation as of July 1, 2019, which was rolled forward to
June 30, 2020. The Authority’s proportion of the net pension liability was based on the Authority’s actual
contributions to the plan relative to the total of all participating employers’ contributions for the year ended
June 30, 2020. The Authority’s proportion measured as of June 30, 2020, was 0.0000276978% which was a
decrease of 0.0000286399% from its proportion measured as of June 30, 2019.
12/31/2020 12/31/2019
Actuarial valuation date (including roll forward)June 30, 2020 June 30, 2019
Deferred Outflows of Resources 386$ 1,212$
Deferred Inflows of Resources 7,296 3,998
Net Pension Liability 4,517 10,151
Authority's portion of the Plan's total Net Pension Liability 0.00003% 0.00006%
Balances at December 31, 2020 and December 31, 2019
Pension Expense and Deferred Outflows/Inflows of Resources – At December 31, 2020, the Authority’s
proportionate share of the PERS expense, calculated by the plan as of the June 30, 2020 measurement date is
$303. At December 31, 2020, the Authority reported deferred outflows of resources and deferred inflows of
resources related to PERS from the following sources:
21
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BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to Financial Statements
For the year ended December 31, 2020
NOTE 5: PENSION OBLIGATIONS (continued)
Public Employees’ Retirement System (PERS) (continued)
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between Expected
and Actual Experience 82$ 16$
Changes of Assumptions 147 1,891
Net Difference between Projected
and Actual Earnings on Pension
Plan Investments 154 -
Changes in Proportion and Differences
between Authority Contributions and
Proportionate Share of Contributions 3 5,389
386$ 7,296$
22
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BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to Financial Statements
For the year ended December 31, 2020
NOTE 5: PENSION OBLIGATIONS (continued)
Public Employees’ Retirement System (PERS) (continued)
The Authority will amortize the above sources of deferred outflows and inflows related to PERS over the
following number of years:
Deferred Deferred
Outflow of Inflow of
Resources Resources
Differences between Expected
and Actual Experience
Year of Pension Plan Deferral:
June 30, 2014 --
June 30, 2015 5.72 -
June 30, 2016 5.57 -
June 30, 2017 5.48 -
June 30, 2018 5.63 -
June 30, 2019 5.21 -
June 30, 2020 5.16 -
Changes of Assumptions
Year of Pension Plan Deferral:
June 30, 2014 6.44 -
June 30, 2015 5.72 -
June 30, 2016 5.57 -
June 30, 2017 -5.48
June 30, 2018 -5.63
June 30, 2019 -5.21
June 30, 2020 -5.16
Net Difference between Projected
and Actual Earnings on Pension
Plan Investments
Year of Pension Plan Deferral:
June 30, 2014 -5.00
June 30, 2015 -5.00
June 30, 2016 5.00 -
June 30, 2017 5.00 -
June 30, 2018 5.00 -
June 30, 2019 5.00 -
June 30, 2020 5.00 -
Changes in Proportion and Differences
between Contributions and
Proportionate Share of Contributions
Year of Pension Plan Deferral:
June 30, 2014 6.44 6.44
June 30, 2015 5.72 5.72
June 30, 2016 5.57 5.57
June 30, 2017 5.48 5.48
June 30, 2018 5.63 5.63
June 30, 2019 5.21 5.21
June 30, 2020 5.16 5.16
23
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BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to Financial Statements
For the year ended December 31, 2020
NOTE 5: PENSION OBLIGATIONS (continued)
Public Employees’ Retirement System (PERS) (continued)
The following is a summary of the deferred outflows of resources and deferred inflows of resources related to
PERS that will be recognized in future periods:
Year Ending
Dec 31,Amount
2021 (1,339)$
2022 (1,995)
2023 (1,879)
2024 (1,467)
2025 (230)
(6,910)$
Actuarial Assumptions – The total pension liability for the June 30, 2020 measurement date was determined
by using an actuarial valuation as of July 1, 2019, which was rolled forward to June 30, 2020. This actuarial
valuation used the following actuarial assumptions:
Pre-retirement mortality rates were based on the Pub-2010 General Below-Median Income Employee
Mortality Table with an 82.2% adjustment for males and 101.4% adjustment for females, and with future
improvement from the base year of 2010 on a generational basis. Post-retirement mortality rates were based
on the Pub-2010 General Below-Median Income Healthy Retiree mortality table with a 91.4% adjustment for
males and 99.7% adjustment for females, and with future improvement from the base year of 2010 on a
generational basis. Disability retirement rates used to value disabled retirees were based on the Pub-2010
Non-Safety Disabled Retiree mortality table with a 127.7% adjustment for males and 117.2% adjustment for
24
DRA
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BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to Financial Statements
For the year ended December 31, 2020
NOTE 5: PENSION OBLIGATIONS (continued)
Public Employees’ Retirement System (PERS) (continued)
females, and with future improvement from the base year of 2010 on a generational basis. Mortality
improvement is based on Scale MP-2020.
The actuarial assumptions used in the July 1, 2019 valuation were based on the results of an actuarial
experience study for the period July 1, 2014 to June 30, 2018. It is likely that future experience will not
exactly conform to these assumptions. To the extent that actual experience deviates from these assumptions,
the emerging liabilities may be higher or lower than anticipated. The more the experience deviates, the larger
the impact on future financial statements.
Long-Term Expected Rate of Return – In accordance with State statute, the long-term expected rate of
return on plan investments (7.00% at June 30, 2020) is determined by the State Treasurer, after consultation
with the Directors of the Division of Investments and Division of Pensions and Benefits, the board of trustees
and the actuaries. The long-term expected rate of return was determined using a building block method in
which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan
investment expense and inflation) are developed for each major asset class. These ranges are combined to
produce the long-term expected rate of return by weighting the expected future real rates of return by the
target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic rates of return
for each major asset class included in PERS’s target asset allocation as of June 30, 2020 are summarized in
the following table:
Long-Term
Target Expected Real
Asset Class Allocation Rate of Return
U.S. Equity 27.00%7.71%
Non-U.S. Developed Markets Equity 13.50%8.57%
Emerging Markets Equity 5.50%10.23%
Private Credit 13.00% 11.42%
Real Assets 3.00%9.73%
Real Estate 8.00%9.56%
High Yield 2.00%5.95%
Private Credit 8.00%7.59%
Investment Grade Credit 8.00%2.67%
Cash Equivalents 4.00%0.50%
U.S. Treasuries 5.00%1.94%
Risk Mitigation Strategies 3.00%3.40%
100.00%
25
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BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to Financial Statements
For the year ended December 31, 2020
NOTE 5: PENSION OBLIGATIONS (continued)
Public Employees’ Retirement System (PERS) (continued)
Discount Rate - The discount rate used to measure the total pension liability was 7.00% as of June 30, 2020.
The projection of cash flows used to determine the discount rate assumed that contributions from plan
members will be made at the current member contribution rates and that contributions from employers and the
nonemployer contributing entity will be based on 78% of the actuarially determined contributions for the
State employer and 100% of actuarially determined contributions for the local employers. Based on those
assumptions, the plan’s fiduciary net position was projected to be available to make projected future benefit
payments of current plan members. Therefore, the long-term expected rate of return on plan investments was
applied to all projected benefit payments to determine the total pension liability.
Sensitivity of the Authority’s proportionate share of the Net Pension Liability to Changes in the
Discount Rate – The following presents the Authority’s proportionate share of the net pension liability
calculated using the discount rate as disclosed above, as well as what the Authority’s proportionate share of
the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower
(6.00%) or 1-percentage-point higher (8.00%) than the current rate:
1%Current 1%
Decrease Discount Rate Increase
(6.00%)(7.00%)(8.00%)
Authority's Proportionate Share
of the Net Pension Liability 5,731$ 4,517$ 3,552$
NOTE 6: RISK MANAGEMENT
The Authority is exposed to various risk of loss related to torts, theft of, damage to and destruction of assets;
errors and omissions; injuries to employees; and natural disaster. The Authority has not obtained any
insurance and may not be properly insured for various risks including workers’ compensation, general
liability, or employee theft.
NOTE 7: RELATED PARTY TRANSACTIONS
All of the Authority’s revenues are received from the Borough either in the form of a direct local subsidy or
miscellaneous revenues derived from Borough owned assets.
26
DRA
F
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28
DRA
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BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to the Required Supplementary Information
For the year ended December 31, 2020
Public Employees' Retirement System (PERS)
Changes of Benefit Terms
None.
Changes of Assumptions
The discount rate changed from 6.28% as of June 30, 2019, to 7.00% as of June 30, 2020.
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Schedule III
Variance December 31,
Original Final Favorable 2019
Budget Budget Actual (Unfavorable) Actual
Revenues:
Operating revenues:
Binocular fees and rentals -$ -$ 288,663$ 288,663$ 112,353$
Miscellaneous - - - - 698
Local subsidy 500,000 500,000 500,000 - 500,000
Total operating revenues 500,000 500,000 788,663 288,663 613,051
Non-operating revenues:
Interest income - - 14,353 14,353 18,017
Total non-operating revenues - - 14,353 14,353 18,017
Total revenues 500,000 500,000 803,016 303,016 631,068
Operating appropriations:
Administration
Salaries and wages 5,000 5,000 4,080 920 4,250
Fringe benefits 2,500 2,500 836 1,664 1,500
Other expenses 102,500 102,500 37,854 64,646 52,600
Total administration 110,000 110,000 42,770 67,230 58,350
Cost of providing services
Salaries and wages 150,000 150,000 - 150,000 18,313
Fringe benefits 20,000 20,000 - 20,000 -
Other expenses 220,000 220,000 33,019 186,981 26,889
Total cost of providing services 390,000 390,000 33,019 356,981 45,202
Total operating appropriations 500,000 500,000 75,789 424,211 103,552
Other non-operating appropriations:
Renewal & Replacement Reserve 1,500,000 1,500,000 1,500,000 - -
Less: total unrestricted net position utilized (1,500,000) (1,500,000) (1,500,000) - -
Net variance -$ -$ 727,227$ 727,227$ 527,516$
Reconciliation of change in net position to Statement of Net Position:
Less: unbudgeted pension expense 1,510 (400)
Change in net position per Statement of Revenues, Expenses
and Changes in Net Position 728,737$ 527,116$
(With comparative totals for the year ended December 31, 2019)
For the year ended December 31, 2020
Schedule of Revenues and Costs Compared to Budget
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
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Schedule IV
December 31, December 31,
Unrestricted Restricted 2020 2019
Operating revenues:
Binocular fees and rentals 288,663$ -$ 288,663$ 112,353
Miscellaneous - - - 698
Local subsidy 500,000 - 500,000 500,000
Total operating revenues 788,663 - 788,663 613,051
Operating expenses:
Administration 41,260 - 41,260 58,350
Cost of Providing Services 33,019 - 33,019 -
Total operating expenses 74,279 - 74,279 58,350
Net income from operations 714,384 - 714,384 554,701
Non-operating revenues (expenses):
Interest income 14,353 - 14,353 18,017
Total non-operating revenues (expenses) 14,353 - 14,353 18,017
Change in net position 728,737 - 728,737 527,116
Net position, January 1 1,524,543 - 1,524,543 997,427
Net position, December 31 2,253,280$ -$ 2,253,280$ 1,524,543$
Total
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
Schedule of Revenues, Expenses and Changes in Net Position
Restricted and Unrestricted
For the year ended December 31, 2020
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
(With comparative totals for the year ended December 31, 2019)
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Schedule V
December 31, Deember 31,
Operating Change Fund 2020 2019
Cash, January 1 1,536,528$ -$ 1,536,528$ 1,013,065$
Cash receipts:
Binocular fees and rentals 288,663 - 288,663 112,353
Miscellaneous - - - 698
Local subsidy 500,000 - 500,000 500,000
Interest Income 14,353 - 14,353 18,017
Total cash receipts 803,016 - 803,016 631,068
Total cash available 2,339,544 - 2,339,544 1,644,133
Cash disbursements:
Operating 65,324 - 65,324 107,605
Total cash disbursements 65,324 - 65,324 107,605
Cash, December 31 2,274,220$ -$ 2,274,220$ 1,536,528$
Total
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
Schedule of Cash Receipts, Cash Disbursements and Changes in Cash
Unrestricted
For the year ended December 31, 2020
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
(With comparative totals for the year ended December 31, 2019)
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BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Board of Commissioners
December 31, 2020
Position
Hank D’Orsi ……………………………………………………... Chairman
Joseph Caliguari …………………………………………………. Vice Chairman
Vincent Bellino…………………………………………………... Commissioner
Wesley Kaskiw…………………………………………………… Commissioner
Honorable Mayor Daniel J. Reiman……………………………… Commissioner
Benny Waters……………………………………………………... Commissioner/Alternate
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To the Chairman and Commissioners
of Borough of Carteret Municipal Port Authority
61 Cooke Avenue
Carteret, New Jersey 07008
We have audited the financial accounts and transactions of the Borough of Carteret Municipal Port
Authority, County of Middlesex, State of New Jersey for the year ended December 31, 2020. In
accordance with requirements prescribed by the Division of Local Government Services, Department of
Community Affairs, State of New Jersey, the following are the General Comments and Recommendations
for the year then ended.
GENERAL COMMENTS AND RECOMMENDATIONS
Contracts and Agreements Required to be advertised by (N.J.S.A.40A:11-4)
N.J.S.A.40A:11-4 - Every contract or agreement, for the performance of any work or furnishing or hiring
of any materials or supplies, the cost or the contract price whereof is to be paid with or out of public funds
not included within the terms of Section 3 of this act, shall be made or awarded only by the governing
body of the contracting unit after public advertising for bids and bidding therefore, except as is provided
otherwise in this act or specifically by any other Law. No work, materials or supplies shall be undertaken,
acquired or furnished for a sum exceeding in the aggregate $40,000 from January 1, 2020 through June
30, 2020 and $44,000 from July 1, 2020 through December 31, 2020, except by contract or agreement.
It is pointed out that the Members of the Authority have the responsibility of determining whether the
expenditures in any category will exceed the statutory minimum within the fiscal year. Where question
arises as to whether any contract or agreement might result in violation of the statute, the solicitor's
opinion should be sought before a commitment is made.
Review of the minutes and financial transactions did not identify any bids requested by public advertising.
The minutes indicate that resolutions were adopted authorizing the awarding of contracts or agreements
for "Professional Services," per N.J.S.A.40A:11-5.
Inasmuch as the system of records did not provide for an accumulation of payments for categories for the
performance of any work or the furnishing or hiring of any materials or supplies, the results of such an
accumulation could not reasonably be ascertained. Disbursements were reviewed, however, to determine
whether any clear-cut violations existed. The results or our examination did not disclose any
discrepancies.
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Contracts and Agreements Required to be advertised by (N.J.S.A.40A:11-4) (continued)
The examination of expenditures revealed individual payments, contracts or agreements in excess of
$6,000 from January 1, 2020 through June 30, 2020 and then $6,600 from July 1, 2020 through December
31, 2020 "for the performance of any work or the furnishing or hiring of any materials or supplies", other
than those where bids had been previously sought by public advertisement or where a resolution had been
previously adopted under the provision of (N.J.S.A.40A:11-6.1).
The supporting documentation indicated that quotes were requested for all items that required them.
Examination of Bills
A test check of paid bills was made and each bill, upon proper approval, was considered as a separate and
individual contract unless the records disclosed it to be a part payment or estimate. The results of the
examination did not disclose any discrepancies with respect to signatures, certification or supporting
documentation.
Payroll Fund
The examination of the payroll account included the detailed computation of various deductions or other
credits from the payroll of the Authority employees and ascertained that the accumulated withholdings
were disbursed to the proper agencies.
Budget Adoption
The State of New Jersey requires that the Authority’s operating and capital budgets be approved and
adopted for each fiscal year. The Authority approved its operating budget on December 10, 2019 and
adopted its operating budget on February 11, 2020.
Acknowledgment
We received the complete cooperation of all the Authority Officials and employees and we greatly
appreciate the courtesies extended to the members of the audit team.
Should you have any questions concerning our comments or recommendations, or should you desire any
assistance in implementing our recommendations, please call us.
Respectfully Submitted,
HOLMAN FRENIA ALLISON, P.C.
Certified Public Accountants
August 6, 2021
Lakewood, New Jersey
36