N.J. Stat. § 26:2F-12
In order to insure that the public health priority funds are expended in conformance with the provisions of this act, the commissioner shall, when he deems it in order, have an audit made of the expenditures of moneys and of services provided by the local health agency receiving public health priority funds and shall, when he shall deem it necessary, have examined all books, papers and vouchers of the agency and its fiscal agent shall have free and unrestricted access thereto for that purpose.
Following fiscal audits, all unexpended public health priority funds and audit exceptions as determined by the commissioner shall be returned to the State Department of Health within 3 months of notification. Such funds shall be expended for priority health services in accordance with the standards of performance and made available as special grants to local health agencies upon application and amounts approved by the commissioner with concurrence of the Public Health Council.
N.J.S. § 26:2F-12