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The Division of Local Government Services is investigating the $1 million shortfall found in the city’s 2012 municipal budget, according to Lisa Ryan, director of communication for the New Jersey Department of Community Affairs.

The division “has recently met with the former CFO and city officials to hear their sides of the story,” Ryan said in an email. “The division is also reviewing related documents this week.”

The division will not comment further until the investigation is complete, which Ryan said will likely be within the next two weeks.

Senator Jennifer Beck requested the investigation last week, which she announced in a press release.

“This predicament is mind-boggling,” Beck was quoted as saying in the release. “How do you approve a budget when you know you can’t cover its costs? This could be fiscal mismanagement of the highest order and it demands answers.”

Officials announced the $1 million shortfall at the Sept. 19 council meeting. Since the announcement was made, former finance director and chief financial officer [CFO] Juan Uribe came forward with allegations that officials knew of the shortfall before the budget was finalized and planned to bond for the extra $1 million all along. But according to city officials, they did not know the discrepancy would be so large and thought other health insurance cost decreases would balance the line item.

The city council on Oct. 3 approved a resolution allowing officials to seek an emergency appropriation to fill the gap in the budget. On Oct. 17, the council will have a final vote on whether to bond $1 million.

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Previous coverage:

Shortfall of $1 million discovered in 2012 budget

Former CFO says officials knew of $1 million shortfall

Emergency budget appropriation approved

Sen. Beck calls for investigation of city finances

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