HARRISBURG, PA — Auditor General Timothy L. DeFoor this week released compliance audit reports for the Kennett Square Borough Police Pension Plan and the Kennett Square Borough Non-Uniformed Pension Plan, concluding that both plans were administered in compliance with applicable state laws and regulations during the review period.
The audits, conducted under the authority of the Municipal Pension Plan Funding Standard and Recovery Act, examined whether borough officials properly administered the plans and addressed prior findings. The reviews covered the period from January 1, 2023, through December 31, 2024, and extended through the completion of fieldwork.
For the Kennett Square Borough Non-Uniformed Pension Plan, auditors determined that borough officials took appropriate corrective action to address a prior finding related to record-keeping deficiencies. The earlier issue cited a failure to maintain an adequate record-keeping system to effectively monitor plan activity. According to the new report, the borough provided annual financial statements of custodial account transactions for the pension plan during the audit period, resolving the concern .
The audit further concluded that, in all significant respects, the Non-Uniformed Pension Plan was administered in compliance with state laws, regulations, contracts, administrative procedures, and local ordinances and policies.
As detailed in the February 2026 report, the non-uniformed plan is a single-employer defined benefit plan locally controlled by ordinance and a plan agreement adopted under Act 15, the Pennsylvania Municipal Retirement Law. Established in 1950, the plan had 21 active members, seven terminated members eligible for future vested benefits, and 19 retirees receiving benefits as of December 31, 2024.
The audit reviewed state aid deposits, employer and employee contributions, benefit calculations for retirees, and the submission of the January 1, 2023, actuarial valuation report. Auditors verified that state aid was deposited within 30 days of receipt and that minimum municipal obligations were properly calculated and funded.
Historical actuarial data included in the supplementary information showed the plan’s funded ratio declined from 90.3 percent as of January 1, 2021, to 83.8 percent as of January 1, 2023, reflecting an increase in unfunded actuarial accrued liability during that period. Despite that shift, auditors did not identify compliance violations within the scope of their review.
A separate audit of the Kennett Square Borough Police Pension Plan similarly found the plan was administered in compliance with applicable laws and that prior recommendations had been addressed.
The audits were not conducted under Government Auditing Standards issued by the Comptroller General of the United States, but were performed to obtain sufficient and appropriate evidence to support the Auditor General’s conclusions.
Both reports have been distributed to borough officials, including the mayor, council members, borough manager, and finance director, and are publicly available through the Pennsylvania Department of the Auditor General.
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