Auditor General DePasquale Urges Harrisburg to Pay Back Pension Plan
Auditor General DePasquale Urges Harrisburg to Pay Back Pension Plan
HARRISBURG (April 17, 2013) – Auditor General Eugene DePasquale today urged Harrisburg officials to correct faulty internal controls that resulted in the city failing to make timely deposits into its police pension plan of more than $2.8 million in state aid received for 2011 and 2012.
State auditors found that in 2011 the city received state aid totaling $4.5 million in two separate payments in September, but did not deposit into the police pension fund $1.88 million of that amount until March 2012. In 2012, the city received a $2.5 million state aid allocation in October, deposited $1.5 million, but did not deposit the remaining $1 million until March 2013. Auditors noted that both incidences of failure to deposit funds were at the written direction of the Office of Harrisburg City Receiver.
“The City of Harrisburg, like many across the state, is facing difficult times, but it has an obligation to first-responders and to taxpayers to make sure that General Municipal Pension System state aid allocations are deposited promptly,” DePasquale said. “The Department of Auditor General will work with the city to ensure full compliance with the audit recommendations and make sure the fund is properly compensated.”
State pension aid for police, firefighters and non-uniformed municipal employee pensions is provided from a two-percent tax on out-of-state casualty insurance premiums.
DePasquale said that when state aid is not promptly deposited into a pension plan in a timely manner, the funds are not available for investment or to pay operating expenses and the risk of possible misuse is increased. In addition to correcting internal city processes, he recommended that the city reimburse the pension plan the lost interest.
City officials agreed with the audit findings. They indicated that they will pay the pension plan $19,000 in owed interest for the 2012 incident. They have not responded to the recommendation to repay interest for the delayed deposit of the 2011 funds. The department encourages the city to submit written responses evidencing compliance with the audit recommendations.
The Department of Auditor General also released audits of Harrisburg’s non-uniform and firefighter pension plans. The three audit reports are available online at www.PaAuditor.gov.
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