Borough may have to repay $180k in Liquid Fuels funds
SHENANDOAH – The borough may have to repay over $180,000 to its Liquid Fuels Fund after apparent missteps and alleged mismanagement in prior years.
Auditor General Timothy DeFoor released his department’s audit of Shenandoah’s Liquid Fuels Fund on Tuesday.
The report outlines findings for a period from Jan. 1, 2023 to Dec. 31, 2024 and reports three deficiencies.
Two of them include recommendations that funds be repaid from the borough’s general fund to the Liquid Fuels Fund.
According to the audit report, the borough made a $100,000 transfer from the general fund to the Liquid Fuels Fund in January 2024 which the borough can’t explain.
The auditor recommended that the borough repay the funds to the Liquid Fuels Fund.
The borough, they said, also spent $103,030.96 in December of 2024 for street lighting, $81,227.83 of which is considered a retroactive expenditure as the bills were from more than 90 days prior. State law does not allow Liquid Fuels Fund money to be used on retroactive expenditures.
Auditors are also recommending the $81,227.83 be repaid.
Additionally, the borough had received its liquid fuels tax allocations in 2023 and 2024 late as the borough failed to file certain forms on time.
In a statement Tuesday, Borough Manager Mike Cadau lambasted prior borough management.
“When I started in January of 2025, it became immediately clear that serious financial irregularities existed throughout Borough operations,” Cadau said. “This audit confirms exactly what we have been saying years of poor controls, weak oversight, and improper financial management created major compliance issues that taxpayers are now forced to deal with.”
“These findings did not occur under the current administration. In fact, my formal response to the Auditor General clearly states that I was not employed by the municipality in 2024 when these violations occurred,” Cadau added. “Our administration has been working aggressively to correct these issues, implement stronger financial controls, improve documentation, increase transparency, and cooperate fully with all ongoing forensic accounting reviews, special counsel investigations, and state agency oversight.”
The borough is not required to repay the funds until and unless PennDOT notifies the borough as such.
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