Audit shows Sunbury may need to reimburse state; council flags management response gaps

Council members reviewed an auditor-general pension finding showing that state reimbursements included amounts above what the third-class city code allows the city to claim. Speakers said payments matched provisions in some police contracts, but the state reimbursed the city for contract elements that exceed what state code authorizes for reimbursement.

One council member summarized the issue this way: the payments themselves had been made according to contract language, but the state’s reimbursement process covered amounts the city was not statutorily entitled to receive. Council members said the audit record indicated the city had not provided a formal management response by the auditor’s exit deadline and criticized that finance staff had not been included in exit interviews.

Officials said the city may need to return overpayments or adjust future reimbursement requests; several council members estimated the near-term budget effect in the range of about $38,000–$43,000 but emphasized the number was not final and that some repayments may already have been processed and simply not yet credited in state systems. Controller Alex and staff pledged to follow up with the auditor general and to reconcile returned funds and any interest owed.

Council members asked that the finance department note the obligation for next year’s budget talks and requested clearer communication in future audit exit processes so that management responses are included before final drafts are issued. The council accepted the pension-audit draft and directed staff to report back with verified figures and any required repayments.