SCRANTON -- The Pennsylvania Auditor General was in Scranton Wednesday laying out his findings from an emergency audit.
The auditor general's office found that the city is out almost $3 million because of pension benefits it never should have given out.
Auditor General Eugene DePasquale told Newswatch 16 what his office found after a three-month audit: 35 retirees from the city of Scranton have been receiving double pension payments for several years and it was never authorized.
The situation has cost the city's pension fund almost $3 million over the past 12 years.
"On this side is what should have happened, you know, this is a neat orderly system. And on this side, that is what actually happened which is the very definition of disorganization," said DePasquale.
During a news conference at city hall in Scranton, auditor general Eugene DePasquale says he was astounded after his office finished a three-month audit trying to figure out why some city of Scranton retirees received double pension payouts as a retirement incentive.
DePasquale says those double pensions are partly responsible for draining the city's non-uniform union pension fund.
When the double pensions were first paid out more than 10 years ago, the fund was 78 percent full. In just one year it dropped to 50 percent full. Today, it's at 23 percent, the worst in the state.
DePasquale also found that city council never specifically authorized a doubling of the pensions. According to the minutes of council meetings, the exact amount of the increase was never discussed.
"I find it astounding that you could talk about an increase in a public forum, as we listen to the tapes, members of the public were asking questions about a doubling and not one actual elected member of the council said, 'what is the actual increase we're talking about?' I find that just absolutely amazing," said DePasquale.
The consequence was a $90,000 a year payment to cover the cost of the double pensions. Add in health care costs for the retirees for a total of $2.9 million over the past 12 years.
"More citizens like myself should be asking for accountability. You know, we pay our taxes on time, we dig deep, we prioritize our budgets so we can pay our taxes and we have a right to know how that money is spent," said Joan Hodowanitz of Scranton.
We reached out to the former mayor Chris Doherty and city council. We only heard back from former councilman Gary DiBilieo who told us off camera that he never knew specifically what the retirement incentive was and doubling pensions was never discussed openly.
Now, 12 years later, DePasquale says the pension funds in Scranton are only a few years from running dry and that could have been avoided with some accountability 12 years ago.
The state auditor general said that the audit has been passed along to the state police and the FBI but he couldn't say if what he found could lead to criminal charges.
