What is the basis of municipal accounting in New Jersey?

The basis of municipal accounting in New Jersey is grounded in the principles established by the Office of the Chief Financial Officer of the State of New Jersey (OCFOA). This framework provides standardized guidelines for local government accounting practices and reporting, ensuring consistency and accountability across municipalities.

The OCFOA outlines specific methodologies that municipalities must follow, which include budgeting practices, financial reporting, and the management of public funds. By adhering to these guidelines, municipalities can effectively track financial activities, report on their fiscal health, and maintain transparency with taxpayers.

While Generally Accepted Accounting Principles (GAAP) are widely used in governmental accounting, the OCFOA serves as the specific regulatory framework tailored to the local context of New Jersey's municipalities. The other options, such as FASB, set accounting standards for private-sector businesses, and NJ Accounting Practices, while relevant, do not specifically govern the municipal level in the same comprehensive manner as the OCFOA. Therefore, the OCFOA is indeed the correct basis for municipal accounting in New Jersey.