Protect Inventory Filing During Fall Vacancies with Best Practices

How a Fall Vacancy Puts Your Best Practices Inventory Filing at Risk

Every fall, the Division of Local Government Services issues the Best Practices Inventory, and every fall a handful of New Jersey municipalities discover that the person who knew the answers left in July. The Inventory is not a survey. It is a self-administered compliance audit covering roughly seventy questions about how the municipality handled its filings, its money, and its records over the past year, and the score determines whether the town receives its full final state aid payment in December.

The calls PM Consultants takes in September and October tend to sound alike: the finance office is down a seat, the filing date is three weeks out, and nobody currently employed can honestly certify what happened in March. What follows is what actually goes wrong in that situation and how towns work through it without guessing.

Who Signs the Best Practices Inventory and What They Certify

The Inventory requires certification from three officials: the chief financial officer, the chief administrative officer, and the municipal clerk. The CFO certifies that the answers are accurate. The clerk certifies that the governing body discussed the completed Inventory at a public meeting and that the results and the officers' certifications are stated in the minutes of that meeting. Everything moves through the DLGS online platform, and there is no paper alternative.

That structure is easy to overlook until one of those seats is empty in September. The certification is personal, attached to a name and a certification number. Somebody has to vouch for seventy answers describing a full year of operations, and if the person who ran those operations left in July, the person signing is reconstructing a record before putting a signature on it.

What Happens to State Aid When the Score Comes Up Short

DLGS decides whether to withhold a portion of a municipality's final formula aid payment based on the Inventory score, and a municipality that fails to submit is treated as scoring zero. The final formula aid payment, which for calendar year towns lands in early December, is the full amount exposed. The passing threshold is set annually and it moves. The 2025 Inventory ran 70 questions and required a minimum of 32 for the full payment. The prior year's version set the bar at 35.

A municipality may appeal its score, though only after submitting the Inventory, and the appeal window has generally closed on the same date as the filing deadline. No town gets to file, wait for the score, and then decide whether to argue about it.

Why a September Vacancy Makes an October Filing Harder Than It Looks

The Inventory does not ask what the municipality intends to do. It asks what the municipality did, mostly in the past twelve months. An interim CFO who started after Labor Day is answering questions about filings, adoptions, and postings that happened before they had a login.

The workaround is documentary. Pull the Annual Financial Statement submission confirmation, the resolution adopting the cash management plan, the certified minutes showing the governing body reviewed the audit, the corrective action plan and the date it went in, the website screenshots showing the adopted budget and audit synopsis. A well-run office has that in one place. An office that has been carrying a vacancy usually has it scattered across three drives and a departed employee's email.

The Questions That Show a Finance Office Running Behind

Core competency questions are compliance checks written as yes or no, and they track real statutory duties. Was the Annual Financial Statement filed on time, now permanently March 10 for counties and calendar year municipalities under the amended N.J.S.A. 40A:5-12. Did the governing body certify its review of the audit within 45 days and file the corrective action plan within 60. Is there a current cash management plan under N.J.S.A. 40A:5-14. Did each urban renewal entity holding a long-term tax exemption submit its annual auditor's report under N.J.S.A. 40A:20-9. Are the budget and audit posted where a resident can actually find them.

An office that has been short-staffed since spring tends to miss these in clusters rather than one at a time, since the same person who files the AFS is usually the person who chases the PILOT reports and updates the finance page of the website.

The Temptation to Answer Yes When the File Will Not Support It

Answers can be corrected after submission only with Division approval, and the completed Inventory is a public document that ends up posted on municipal websites and pulled by reporters. The bigger exposure is the annual audit, now due no later than August 31 for calendar year local units. The auditor tests the same underlying facts a few months later, and a "yes" the workpapers contradict becomes a conversation nobody wants during budget preparation.

Where the honest answer is no, answering no and noting the corrective step in the comments is the cleaner path. The scoring absorbs a certain number of misses; a certification that cannot be defended does not.

Why Late October Is the Worst Time to Absorb a Compliance Filing

Fourth quarter bills, delinquency notices, tax sale follow-up, the first real work on next year's budget, and health benefit renewals all sit in the same weeks. Towns that get through it cleanly assign the Inventory to one person in early September, calendar the public meeting where the governing body will discuss it, and work backward from the filing date rather than the meeting date.

If your CFO, administrator, or clerk seat is open heading into the fall and nobody owns the Inventory, PM Consultants can put a credentialed professional in the chair who can rebuild the supporting file, answer the questions honestly, and certify with confidence. Call (732) 674-3112.