Official Site of The State of New Jersey

TRENTON—A follow-up report released today by the Office of the State Comptroller finds that while the City of Brigantine took actions to reduce the lifeguard pension plan’s deficits, the City continues to rely on inaccurate analyses by an insurance broker with built-in conflicts of interest. 

OSC’s original 2022 audit found that Brigantine’s failure to scrutinize a broker’s inaccurate proposal led to Brigantine spending as much as $191,000 more than necessary on health insurance in one year.  The broker failed to consider a lower-cost insurance plan that did not offer broker commissions.  OSC also found Brigantine’s lifeguard pension plan had a $4.5 million unfunded liability, due to Brigantine’s failure to make adequate contributions annually.

OSC’s follow-up report finds that Brigantine fully complied with 10 of 15 OSC recommendations, including increasing contributions to the lifeguard pension plan and ensuring that Brigantine accurately calculates and reviews sick leave payments to employees. However, OSC’s report said that Brigantine failed to implement key recommendations that would provide transparency and protect public funds.

Specifically, OSC found that Brigantine continued to allow the broker to be paid a commission by the insurance company, rather than the City paying the broker a flat fee to minimize the risks of conflicts of interest. Further, while the broker disclosed the amount of the commission, the broker did not disclose any hidden incentives or bonuses the insurance company might offer, which is required by state law. Brigantine also failed to independently evaluate the broker’s proposal for insurance in 2024 or take any actions to hold the broker accountable for the past years’ erroneous analyses. OSC noted that the broker’s 2024 analysis also included misleading and inaccurate data.

“When local governments have opportunities to provide transparency and save tax dollars, they should take them,” said Acting State Comptroller Kevin Walsh. “Instead, what we found was that when Brigantine had discretion, the municipality used it to maintain the status quo.”

OSC’s follow-up report also found that Brigantine continued to allow double dipping – making wasteful health benefit waiver payments of $15,000 to three employees even though they received City-provided insurance from a family member. Waiver payments are permissible under the law, but OSC recommended that Brigantine eliminate the double-dipping, calling it “an unnecessary giveaway.”  Since 2016, NJ Division of Local Government Services, part of the Department of Community Affairs, has urged municipalities annually to reconsider whether waivers remain “fiscally prudent.” 

OSC also noted remaining issues with the lifeguard pension plan. Although Brigantine increased annual contributions to address the plan’s deficits, the 2024 actuarial report identified an unfunded liability of $4.87 million and recommended that Brigantine raise annual contributions to at least $200,000.

Read the report.

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To report government fraud, waste, mismanagement, or corruption, file a complaint with OSC or call 1-855-OSC-TIPS.