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Audit Finds Roselle Improperly Offered Health Insurance, Waiver Payments to Council – Again
A follow-up review by the Office of the State Comptroller found that Roselle strengthened some internal financial controls but failed to address other deficiencies.
- Posted on - 01/24/2024
TRENTON – A follow-up review released today by the Office of the State Comptroller found that the Borough of Roselle strengthened some internal financial controls but still failed to address deficiencies identified in 2021.
OSC’s 2021 audit of Roselle found that the Borough could have saved $1.9 million if it had enrolled in the State Health Benefit Program (SHBP), rather than a private insurance carrier. Roselle also wasted $1.4 million due to lax internal controls, including improperly paying health insurance coverage or opt-out payments to deceased retirees or their spouses.
The follow-up review found Roselle enrolled in the SHBP, which remained the lowest cost option. Roselle also had recovered $155,000 in funds from the prior health insurance provider for payments improperly made to deceased retirees or their spouses.
But, OSC auditors also found that Roselle failed to fully address other recommendations made in 2021.
Specifically, Roselle continued to improperly pay for health insurance premiums and waiver payments for council members. By law, elected officials and appointees must work a full-time schedule –defined as a minimum of 35 hours a week-- in order to qualify for health benefits. Roselle updated its employee manual after OSC’s first audit to define the council members and mayor as working 32.5 hours a week (up from 20 hours a week) – but that still does not qualify as full-time. Additionally, the council’s hours were not documented. OSC auditors found five council members received waiver payments for opting out of health insurance coverage, totaling $18,119 in 2022. The sixth member received health insurance coverage, and the premium cost $10,688 in 2022.
"It is important that Roselle--and all municipalities--comply with the law to protect taxpayers and safeguard public funds," said Acting State Comptroller Kevin Walsh.
OSC's follow-up review also found that Roselle failed to follow Local Public Contracts law and unlawfully awarded a career-services contract without soliciting competitive bids.
Finally, OSC’s review found the Borough continued to permanently assign municipal cars to employees, without monitoring vehicle usage and requiring employees to document trips and mileage.
To report government fraud, waste, mismanagement or corruption, file a complaint with OSC or call 1-855-OSC-TIPS.
The Office of the State Comptroller (OSC) is an independent State agency that works to make government in New Jersey more efficient, transparent and accountable. OSC is tasked with examining all aspects of government expenditures, conducts audits and investigations of government agencies throughout New Jersey, reviews government contracts, and works to detect and prevent fraud, waste and abuse in Medicaid.
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