THE SOUTHEAST MORRIS COUNTY MUNICIPAL UTILITIES AUTHORITY SUMMARY OR SYNOPSIS OF AUDIT REPORT FOR PUBLICATION

THE SOUTHEAST MORRIS COUNTY MUNICIPAL UTILITIES AUTHORITY SUMMARY OR SYNOPSIS OF AUDIT REPORT FOR PUBLICATION Attention is directed to the fact that a summary of the audit report, together with the recommendations, is the minimum required to be published pursuant to N.J.S. 40A:5-7. Summary or synopsis of the 2025 Audit Report of The Southeast Morris County Municipal Utilities Authority as required by N.J.S. 40A:5A-16. STATEMENT OF NET POSITION ASSETS Current Assets: Cash and Cash Equivalents $ 38,892,307 Change Fund 700 Total Cash and Cash Equivalents 38,893,007 Water Charges Receivable 3,182,835 Lease Receivable 130,798 Other Accounts Receivable (Less Allowance for Uncollectible Receivable of $103,530) 398,783 Inventory 415,343 Total Current Assets 43,020,766 Noncurrent Assets: Lease Receivable 342,296 Capital Assets: Depreciable Capital Assets 62,848,426 Land 4,045,860 Construction in Progress 45,960,776 Total Capital Assets 112,855,062 Total Noncurrent Assets 113,197,358 TOTAL ASSETS 156,218,124 DEFERRED OUTFLOWS OF RESOURCES Deferred Outflows Related to Pensions 896,070 Deferred Outflows Related to OPEB 6,628,902 Authority Contribution Subsequent to the Measurement Date - Pensions 731,907 Total Deferred Outflow of Resources 8,256,879 LIABILITIES Current Liabilities: Accounts Payable $ 2,086,869 Contracts Payable 16,448,789 Payroll Deductions Payable 44,733 Accrued Wages Payable 186,799 Loan Payable - Due to Town of Morristown 2,492 Total Current Liabilities 18,769,682 Noncurrent Liabilities: Net Pension Liability 7,343,705 Net OPEB Liability 14,697,506 Compensated Absences Payable 146,685 Loan Payable - Due to Town of Morristown 547,677 Total Noncurrent Liabilities 22,735,573 Total Liabilities 41,505,255 DEFERRED INFLOWS OF RESOURCES Deferred Lease Resources 473,094 Deferred Inflows Related to Pensions 443,613 Deferred Inflows Related to OPEB 5,918,549 Total Deferred Inflow of Resources 6,835,256 NET POSITION Net Investment in Capital Assets 112,304,893 Restricted 6,298,524 Unrestricted/(Deficit) (2,468,925) Total Net Position $ 116,134,492 STATEMENT OF REVENUE, EXPENSES AND CHANGES IN NET POSITION Operating Revenue: Water Charges $ 26,698,099 Water Connection Fees 1,412,438 Other 419,320 Miscellaneous: Wet Cut Application Fees $ 14,308 Tap Application Fees 49,814 Fines/Penalties 11,231 Leases/Rents 147,949 Total Miscellaneous 228,354 Total Operating Revenue 28,758,211 Operating Expenses: Operating Appropriations 15,954,041 Depreciation 2,014,995 Total Operating Expenses 17,969,036 Operating Income 10,789,175 Nonoperating Revenue/(Expenses): Interest Income 887,560 Interest Expense - Loans (27,627) PFAS Settlement 2,551,201 Total Nonoperating Revenue/(Expenses) 3,411,134 Change in Net Position Before Other Items 14,200,309 Other Items: Cancellation of Prior Year Accounts Receivable (801,061) Total Other Items (801,061) Change in Net Position 13,399,248 Net Position, Beginning of Year 102,735,244 Net Position, End of Year $ 116,134,492 RECOMMENDATIONS It is recommended that: The Chief Financial Officer review the ending general ledger balances periodically and make any necessary journal entries to adjust balances to supporting ledgers, schedules, and amounts. Returned checks and refunds are not posted as additional billings in the general ledger. * * * * * * * * A Corrective Action Plan, which outlines actions The Southeast Morris County Municipal Utilities Authority will take to correct the findings listed above, will be prepared in accordance with federal and state requirements. A copy of it will be placed on file and made available for public inspection in the office of the Authority in the Southeast Morris County Municipal Utilities Authority within 45 days of this notice. The above summary or synopsis was prepared from the report of audit of The Southeast Morris County Municipal Utilities Authority, County of Morris, for the year ended December 31, 2025. This report of audit, submitted by Kathryn L. Mantell, Certified Public Accountant and Registered Municipal Accountant of Nisivoccia, LLP is on file at the Authority's Administrative Offices and may be inspected by any interested person. Drew Saskowitz Executive Director July 23 2026 LNYS0560445 $117.00