New Jersey Statutes Title 52. State Government, Departments and Officers 52 § 15C-8

c. (1) As to entities that are not required by law to undergo periodic certified financial audits, the State Comptroller shall determine the frequency with which financial audits shall be conducted of such entities by the State Comptroller by establishing objective criteria, which criteria shall weigh relevant risk factors, including, but not limited to, the size of the entity's budget and the entity's past performance.

(2) As to entities that are required by law to undergo periodic certified financial audits, the State Comptroller shall undertake analysis and review of the certified financial audits of such entities and of the procedures used to conduct those audits. When the State Comptroller's analysis and review identifies weaknesses, inadequacies or failures in the entity's financial controls or concerns about the quality or independence of the audits, the State Comptroller shall be authorized to undertake a financial audit or such other steps as the State Comptroller deems appropriate. In determining when to proceed with a financial audit, the State Comptroller may also take into account information obtained pursuant to section 10 of this act; referrals or recommendations from Executive branch departments or agencies; or assessments or evaluations of the entity's management, performance or financial condition from federal or State government agencies, such as those undertaken as part of the New Jersey Quality Single Accountability Continuum for school districts.

(3) The State Comptroller shall establish objective criteria for undertaking performance and other reviews authorized by this act, which criteria shall weigh relevant risk factors, including, but not limited to: (a) the size of the entity's budget, (b) the entity's past performance, (c) the frequency, scope, and quality of any audits or reviews that have been performed regarding the entity's financial condition or performance, (d) assessments or evaluations of the entity's management, performance or financial condition such as those undertaken as part of the New Jersey Quality Single Accountability Continuum for school districts, and (e) other credible information which suggests the necessity of a review.

(4) For purposes of this subsection, “entity” means any unit in the Executive branch of State government, including all entities exercising executive branch authority, public institutions of higher education, independent State authorities, units of local government and boards of education or their vendors. For purposes of this subsection, “certified financial audits” does not include audits conducted by the State Auditor.