State audit finds rockaway cut costs, lowered taxes but still faces oversight gaps

Rockaway, NJ — A follow-up state audit found Rockaway Township saved more than $1.4 million on prescription benefits and used excess funds to reduce property taxes, but still faces compliance issues with contracts and payroll oversight. The review, released in late April, examined whether the township corrected problems flagged in a 2023 audit—and found most reforms completed, with a few key gaps remaining.

Of 15 recommendations, the township fully implemented 13 and partially addressed two, according to the report.

Millions saved, taxes offset

Auditors credited Rockaway with significant financial improvements since the original review. Switching employee prescription coverage to the State Health Benefits Program generated roughly $1.4 million in first-year savings, while eliminating duplicate retiree coverage added another $755,000 in savings.

The township also used surplus trust funds to offset nearly $1 million in local property taxes, easing the burden on residents.

In addition, officials reduced long-idle capital project balances by $10.2 million—freeing up funds that had been sitting unused for years.

Most reforms completed, but gaps remain

While the audit found “substantial progress,” it flagged ongoing concerns with how the township handles certain contracts and internal payroll controls.

Auditors said Rockaway still needs to fully comply with New Jersey’s Local Public Contracts Law, particularly in how it awards insurance-related contracts. In one case, the township approved a multi-year arrangement that exceeded legal limits.

The report also identified a payroll oversight issue where an employee approved their own overtime—something auditors say violates standard internal control practices.

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Key Points
• Rockaway saved over $1.4M on benefits and reduced taxes using surplus funds
• 13 of 15 audit recommendations fully implemented
• Ongoing issues include contract compliance and payroll oversight

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Prior issues largely addressed

The original 2023 audit identified weaknesses in areas including sick leave payouts, overtime compliance, and procurement practices. The follow-up found the township updated policies, revised labor agreements, and corrected improper payments.

Auditors also noted improved transparency, including regular reporting on capital projects and tighter controls on employee leave benefits.

What happens next

State auditors urged Rockaway to fully address the remaining issues, particularly around contract compliance and internal approvals, to ensure long-term accountability.

Township officials disputed some findings but said they will continue refining policies.

The audit remains active as a benchmark for future oversight, with no additional review timeline announced.

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