Appeal from the Order of the Court of Common Pleas of Delaware County in case of In Re: Appeal from the Annual Audit and Financial Report of the Auditors of the Borough of Upland for the Calendar Year 1973, No. 11570 of 1974.
Jack Brian, with him Richard, Brian, DiSanti & Hamilton, for appellant.
Edward J. Zetusky, Jr., Assistant City Solicitor, for appellees.
Judges Crumlish, Jr., Mencer and Rogers, sitting as a panel of three. Opinion by Judge Mencer.
[ 36 Pa. Commw. Page 539]
The appellants in this case are the elected auditors of the Borough of Upland who are charged by statute with the duty of annually auditing, adjusting, and settling the accounts of the Borough. See Section 1041 of The Borough Code (Code), Act of February 1, 1966, P.L. (1965) 1656, as amended, 53 P.S. § 46041. Pursuant
[ 36 Pa. Commw. Page 540]
to their audit of the Borough of Upland's accounts for the year 1973, the auditors filed a report which included surcharges against the mayor, the borough secretary, and all six members of the borough council. These officials appealed to the Court of Common Pleas of Delaware County, pursuant to Section 1044 of the Code, 53 P.S. § 46044. When the Court of Common Pleas sustained the appeal and set aside the surcharges, the auditors appealed to this Court. We affirm the lower court.
Section 1041(c) of the Code, 53 P.S. § 46041(c), authorizes the imposition of surcharges under certain circumstances and provides:
The amount of any balance or shortage, or of any expenditure of a kind, or made in a manner, prohibited or not authorized by statute, which causes a financial loss to the borough, shall be a surcharge against any officer against whom such balance or shortage shall appear, or who by vote, act, or neglect, has permitted or approved such expenditure, but no elected or appointed official of a borough shall be surcharged for any act, error or omission in excess of the actual financial loss sustained by the borough, and any surcharge shall take into consideration as its basis the results of such act, error or omission and the results had the procedure been strictly according to law. The provisions hereof limiting the amount of any surcharge shall not apply to cases involving fraud or collusion on the part of officers, nor to any penalty enuring to the benefit or payable to the Commonwealth. (Emphasis added.)
Thus, in order to impose a surcharge, the auditors must show that a shortage "appears against" an official or that an official has, by vote, act or neglect,
[ 36 Pa. Commw. Page 541]
permitted or approved an improper expenditure. Absent fraud or collusion, the amount of a surcharge cannot exceed the actual ...