New Jersey Localities Falling Through the GAAP

One major difference between Harrisburg, Pa and Union County, NJ is that Harrisburg and the Authority running their incinerator follow Generally Accepted Accounting Principles.  Union County, and most other New Jersey local governing bodies, do not as I learned from Richard Raphael, Executive Managing Director, Fitch Ratings Agency at the Hall Institute’s Forum on the Public Pension Crisis.
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This would have been the guy who gave Union County an AAA bond rating admitting that the finances he was studying were ‘very non-transparent’*.  I asked about that.

There were no microphones in the audience which is why the full clip of the forum, available here**, edits out the questions.  As I recall I asked:

If they don’t follow GAAP standards how can you even rate a locality in New Jersey, like Union County for example, which may be having hundreds of thousands of dollars from their musicfest unaccounted for or keeping $10 million off-budget to make it appear they are using up surplus or not reporting their OPEBs?  How can you rate very non-transparent financials?

At the time I seem to recall his answer as being weaselly but with a chance to review it:

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I still do though I now see the 40,000*** reasons that Mr. Raphael would favor this system of rating.

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* And then, realizing what he had just said, quickly adding ‘very different’.

** 2:31 is where the clips pulled here begin

*** On June 14, 2011 Fitch gave it’s highest rating to Union County’s $130 million in Bond Anticipation Notes.   On August 3, 2011 Fitch, Inc. was paid $40,000 by Union County.

3 responses to this post.

  1. Posted by Javagold on October 24, 2011 at 12:48 am

    ummm, ummm, ummmm,…………bunch of corrupt frauds….their day is coming

    Reply

  2. […] sector.  He was still operating under ethical standards prevalent in New Jersey government, the land that GAAP forgot, where funds go missing all the time and authorities don’t consider it […]

    Reply

  3. […] sector.  He was still operating under ethical standards prevalent in New Jersey government, the land that GAAP forgot, where funds go missing all the time and authorities don’t consider it […]

    Reply

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