Shenandoah Borough officials say a newly released forensic accounting report shows former Borough Manager Joseph Palubinsky continued receiving payroll, vacation, sick, and personal-time payments for nearly three years after his retirement in 2015.
The findings were announced in a press release issued by Borough Manager Mike Cadau, which the Borough describes as its fourth forensic review of prior administrative practices.
The Borough says the latest report focuses on payments made to Palubinsky following his retirement on May 30, 2015.
According to the Borough’s press release and a written report by forensic accountant Joseph Yanushefsky Jr., Palubinsky received regular payroll checks as well as vacation, sick, and personal-time compensation through January 2018.
Yanushefsky states in his report that he reviewed cancelled checks, payroll ledgers, vendor records, benefit certificates, Borough meeting minutes, and other internal documents as part of his analysis.
This report and several previously issued by the Borough allege financial mismanagement among Shenandoah’s former managers, including Palubinsky and Tony Sajone.
Report Identifies More Than $55,000 in Excess Payroll Costs
Yanushefsky writes that the Borough issued 59 payroll checks to Palubinsky after his retirement, totaling $59,636.59 in net pay.
His report concludes that the Borough incurred $55,851.82 in excess payroll cost above what would have been permitted under the union contract referenced in Palubinsky’s alleged employment agreement.
That amount includes vacation, sick, and personal-time payments, a $5,200 payment issued in 2018 without tax withholding, and employer tax match obligations tied to those payouts.
According to the report, the excess amounts consisted of:
- $27,666.15 in vacation pay beyond contract limits
- $14,774.33 in excess sick-time payments
- $6,637.28 in personal-time payments
- $5,200 in an additional 2018 payment with no supporting background
- $1,574.06 in employer-paid taxes
Yanushefsky states in the report that he is not a legal expert and is deferring all legal interpretation to Borough officials or law enforcement.
Borough: Palubinsky Was Not a Union Employee
The Borough’s press release says its review determined that Palubinsky was not a member of the AFSCME union and did not pay union dues.
In his report, Yanushefsky writes that, as a non-union employee, Palubinsky was not entitled to sick or vacation benefits under the union contract that his alleged employment agreement referenced.
According to Yanushefsky’s report, Borough officials requested documentation supporting any employment agreement after finding no records authorizing a non-union employee to receive union-based benefits.
Following that request, the report states that a 2013 employment agreement was faxed to the Borough solicitor by Palubinsky’s attorney. The Borough’s press release says that agreement referenced benefit terms tied to the AFSCME bargaining unit.
The press release states that the Borough’s investigation found no minutes, resolutions, or authorizations indicating Borough Council approved any post-retirement accrual or payout of vacation or sick leave for Palubinsky.
The Borough also states in the release that no documented approval exists authorizing a non-union employee to continue receiving union-based benefit accruals following separation.
Report Notes Contract Limits Were Exceeded
In the report, Yanushefsky writes that even under the terms of the alleged 2013 agreement, the union contract language it incorporates would not have permitted the levels of vacation and sick-time payments issued to Palubinsky.
His calculations compare the hours paid to the maximum hours allowed under the union contract’s provisions for accrued vacation and sick leave during the final 36 months of employment.
ALSO READ:
- Forensic Report Finds Financial Irregularities Under Former Shenandoah Official
- Shenandoah Manager: Attorney General’s Office Now Involved in “Financial Improprieties” Investigation
- Shenandoah Hires Special Counsel to Investigate Alleged Financial Mismanagement
- Shenandoah Officials Meet With IRS as Alleged Financial Mismanagement Investigations Continue
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