Under which statute are municipalities required to have an annual audit?

The requirement for municipalities to have an annual audit is established under the statute N.J.S.A. 40A:5-4. This statute specifies that all municipalities in New Jersey must conduct an audit of their financial statements annually, ensuring transparency and accountability in their financial operations. The requirement not only helps in maintaining proper fiscal oversight but also serves to assure the citizens that municipal funds are being managed responsibly.

By mandating an annual audit, this statute plays a crucial role in public finance, requiring municipalities to engage independent auditors to assess their financial health and compliance with applicable laws and regulations. This is important for identifying potential issues, enhancing financial management practices, and fostering public trust in municipal governance.

Other statutes listed in the choices address different aspects of municipal governance and finance but do not specifically mandate annual audits for municipalities. For instance, some relate to public contracts or different aspects of municipal finance but do not impose the audit requirement directly as N.J.S.A. 40A:5-4 does.