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State aid again overpays townships to support local pensions

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(The Center Square) – Sloppy reporting practices have meant a few Pennsylvania townships received extra state aid for their pensions – and one not receiving as much as it should have.

A recent round of state audits caught the mistakes, giving municipal officials the chance to fix those errors.

The money, which comes from a state tax on out-of-state companies selling fire and casualty insurances, is meant to bolster local pension funds. Last year, municipal pensions received $329 million in state aid.

“Our audits make sure state pension aid is used as required by law, which helps to reduce financial burdens on local taxpayers,” Auditor General Timothy DeFoor said in a news release.

Though some townships had minor errors, others were more significant.

In Forest County, Jenks Township “again failed to implement procedures” to align state aid payments with its pension costs, receiving an overpayment of $12,600 for pension costs in 2021 and 2022. It will have to repay the amount, plus interest.

The problem persists from a previous audit, where the township had to repay $12,000 for miscalculated pension costs in 2015-2017.

Similarly, Franklin County’s Washington Township overstated payroll in 2022 and received an extra $5,200 in state aid, which it has already repaid.

Southwest Greensburg, a borough in Westmoreland County, counted an ineligible worker in its state aid calculation “due to a turnover of plan officials” and “lacked adequate procedures” to prevent a $4,800 pension overpayment.

“We also recommend that in the future, plan officials establish adequate internal control procedures, such as having at least two people review the data certified, to ensure compliance,” the audit report noted.

In one township, officials made the opposite mistake, shortchanging themselves.

Martic Township in Lancaster County failed to count an eligible worker and made other errors on its certification forms since 2019, resulting in a net underpayment of $9,300.

“Plan officials failed to establish adequate internal control procedures to ensure the accuracy of the data certified,” the report noted.

The auditor finds such mistakes on occasion, with bigger payment problems happening in larger towns. Camp Hill’s mistake meant it was underpaid by $30,000 earlier this year, Lancaster was overpaid by $26,000, and Reading and Bethlehem were both overpaid by $15,000.

Occasionally, though, small places like Carroll Township in Washington County reach similar heights, getting an extra $20,000 beyond what it was due.

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