AVONDALE, PA — A state audit of Avondale Borough’s Non-Uniformed Pension Plan has uncovered multiple compliance issues, including overpayments of state aid, excessive municipal contributions, and failure to follow proper procedures for awarding professional services contracts, according to a report released by Pennsylvania Auditor General Timothy L. DeFoor.
The audit, covering the period from January 1, 2020, through December 31, 2024, concluded that while the borough’s pension plan generally complied with applicable state laws, several key findings revealed ongoing administrative and legal shortcomings. The plan, part of the Pennsylvania Municipal Retirement System, serves the borough’s non-uniformed employees and retirees.
Among the most significant findings, auditors determined that Avondale Borough received and retained $2,163 in excess state aid in 2022 and made municipal contributions exceeding required levels in 2020 and 2021. The excess funds — totaling nearly $5,900 — remain in the borough’s unallocated reserve account and general fund.
The Auditor General’s office ordered the borough to repay the overpayment with interest and to reconcile future state aid allocations with actual pension costs, warning that failure to comply could lead to a withholding of future state pension aid.
“The borough again failed to reconcile its annual state aid allocation with the plan’s annual pension costs,” auditors wrote. “We are concerned by the borough’s failure to correct previously reported findings and strongly encourage timely implementation of the recommendations.”
In a second major finding, the audit cited the borough for noncompliance with Act 205 — the law governing municipal pension funding — after officials failed to adopt the required procedures for awarding professional services contracts. Despite being advised to correct this issue in a prior audit, the borough again failed to document or demonstrate compliance.
Auditors said this lapse undermines transparency in pension administration and called on the borough to implement formal written procedures and maintain records for future contracts. Borough officials agreed with the finding but have yet to implement corrective measures.
A third finding revealed that two full-time borough employees were allowed to opt out of the pension plan in 2022, a move auditors said was inconsistent with borough ordinance and state law. The borough council approved the decision by motion rather than ordinance, which auditors deemed invalid. They recommended the borough either enroll the employees or properly amend its pension ordinance.
Borough officials agreed with all three findings and indicated they intend to enact an ordinance to formally withdraw from the plan as of July 19, 2022.
The Avondale Borough Non-Uniformed Pension Plan currently has no active members and four retirees receiving benefits. The Auditor General’s office said compliance with its recommendations will be evaluated during the next audit cycle.
The full audit report is available on the Pennsylvania Department of the Auditor General’s website at PaAuditor.gov.
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