Pension audit reports cite problems in Pennsylvania's Northampton, Delaware counties

Recent audits by the Pennsylvania auditor general flagged some pension issues in the commonwealth, noting overpayments in state aid along with one borough slipping into moderate distress in its pension funding levels.

The auditor noted problems in Forks Township, Northampton County, for misreporting pension data. A previous audit found the township reported incorrect pension data that led to about a $40,000 overpayment in state aid in 2018. However, a similar issue occurred for 2020-22, leading to another about $15,000 overpayment.

“Plan officials again failed to establish adequate internal control procedures, such as having another individual review the data reported, to ensure the accuracy of the data certified and compliance with the prior audit recommendation,” the report noted.

Additionally, the township used that overpayment to fund its minimum municipal obligation for the police and non-uniformed pension plans. If the township reimburses the state from the pension plan, it will have to pay into the pension plan with interest to correct the issue.

In 2016, the township had an issue with underpaying its MMO for the police pension by about $38,000 which remained uncorrected. Officials agreed to correct the issue, which they had previously missed.

“There was a turnover in municipal officials, and current officials were under the impression that this matter was previously resolved,” the report noted.

In Delaware County, Parkside Borough was also noted for pension issues — and its silence.

The auditor general’s report found that the borough had not fixed underfunding problems noted by the auditor in previous reports to bring the police pension out of financial distress.

“We are extremely concerned about the funded status of the plan contained in the schedule of funding progress included in this report which indicates the plan’s funded ratio is 51.7%,” the report noted.

The pension is in “Level II moderate distress status” and failed to “implement Act 44 mandatory distressed provisions.”

If the police pension falls below a funded ratio of 50%, it will then be in severe distress. The borough was previously in moderate distress in 2010-14 before improving to minimal distress, but slipped again into moderate distress since 2017.

“The borough has not submitted a plan for administrative improvement,” the report noted, and had not submitted relevant forms on how to remedy issues to the state since 2014.

The auditor recommended officials contact the Municipal Pension Reporting Program for guidance to address issues. That might be unlikely, though.

“A management response was requested of municipal officials,” the report noted. “However, none has been provided.”

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