The Office of the State Auditor says it plans to conduct a special audit of Moriarty's public works department.
The city notified the state auditor of potential discrepancies in connection with utility billing and water meter readings.
Officials say the special audit will examine whether city employees gave special treatment to certain water users.
The auditor's office said in a statement Wednesday that they appreciated the city bringing the issue to light and will determine whether there is any possible fraud, waste or abuse.
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