SHENANDOAH - An independent forensic accounting review has identified serious payroll and retirement-benefit irregularities involving two former Shenandoah Borough employees, with issues dating back several years and spanning multiple prior borough administrations.
According to Shenandoah Borough officials, the forensic review was conducted by Joseph Yanushefsky, CPA, a forensic accountant specializing in public-sector investigations. The review was commissioned at the request of the Borough’s Special Counsel, Maria T. Casey, Esq., and focused on compliance with union contract provisions, retirement rules, and Pennsylvania public-sector employment requirements.
As a result of the findings, Shenandoah Borough has formally referred the matter to the Pennsylvania Office of the Attorney General and the IRS Criminal Investigation Division for review and potential enforcement action.
Findings Involving Former Borough Manager Joseph Palubinsky
The forensic review examined post-retirement payments made to Joseph Palubinsky, who served as Shenandoah Borough Manager prior to retiring on May 31, 2015.
According to the forensic report, Palubinsky continued to receive borough payroll payments through 2018, despite his retirement. A total of 59 bi-weekly payroll checks were issued and cashed after his retirement, totaling $59,636.59. In addition, the report found that Palubinsky also received vendor payments and borough-provided benefits through 2025.
The forensic analysis determined that these payments were charged to vacation, sick, and personal time in a manner inconsistent with the applicable union contract. The report references PRMS pension criteria, which require unused vacation and sick time to be incorporated as a lump-sum calculation into a pension, subject to strict limits, rather than being paid out as continued bi-weekly salary after retirement.
The review identified multiple contract violations, including:
- 1,015 hours of vacation time paid, despite a contractual allowance of 208 hours based on length of service
- 978 hours of sick leave paid, exceeding the contract cap of 720 hours
- 251 hours of personal time paid, despite no contractual provision allowing personal time payouts upon retirement
The forensic accountant calculated excess compensation totaling $55,851.82, including employer-matched taxes, beyond what was permitted under union contract terms and retirement rules.
Yanushefsky noted in the report that Palubinsky effectively “circumvented” retirement rules by continuing to receive bi-weekly payroll payments instead of properly incorporating accrued leave into his pension calculation.
Findings Involving Former Borough Employee Frank Breznik
The forensic review also examined payments made to Frank Breznik, a former borough employee.
According to the report, Breznik signed a Workers’ Compensation Termination and Resignation Agreement on January 31, 2023, as part of a settlement. Under the agreement, he resigned from borough employment and agreed he would not seek reemployment with Shenandoah Borough in any capacity.
At the same time, Breznik applied for and was approved for retirement benefits. His final payroll date was listed as February 17, 2023.
Despite this, borough payroll records show that Breznik continued to receive employee pay through August 30, 2023, totaling $27,346.56. These payments were charged to a combination of sick leave, vacation time, personal time, and regular hours.
The forensic report concluded that these post-resignation payments appear to violate the Union Contract, the Workers’ Compensation termination agreement, and standard retirement and payroll rules.
Referral to State and Federal Authorities
Based on the findings of the forensic accounting report, Shenandoah Borough has formally transmitted the information to the Pennsylvania Office of the Attorney General and the IRS Criminal Investigation Division.
According to the borough, these agencies are responsible for evaluating potential violations of public-sector pension law, payroll fraud, tax law, and the misuse of municipal funds.
Borough Response
Borough Manager Michael Cadau emphasized that the actions identified in the report occurred prior to the current administration.
“These findings involve actions taken long before this administration took office, but the people of Shenandoah deserve accountability,” Cadau said. “This matter has now been referred to the appropriate state and federal law-enforcement authorities. Our duty is to protect public funds and restore trust in Borough government.”
Commitment to Transparency
Shenandoah Borough officials stated that the borough remains committed to full transparency, accountability, and fiscal responsibility, and will continue to cooperate with all reviewing authorities. Public updates will be provided as legally permitted.
The information in this article is based on the independent forensic accounting report and an official borough press release.