Officials in Shenandoah say they met earlier this week with an agent of the Internal Revenue Service in Scranton.
Council President Joe Boris along with Borough Manager Mike Cadau and Joseph Yanushewsky, of Hazleton, who is conducting a forensic audit for Shenandoah attended the meeting, which was at their request, not the IRS.
In a conversation this week with The Canary, Cadau explained that the Borough is mostly looking into alleged discrepancies with Forms 1099 and 941 and trying to get an assessment of how much trouble Shenandoah could be in in the near future.
Boris and Cadau seem to be headlining a borough investigation into what it believes is financial mismanagement of previous administrations, including Cadau’s predecessor in the Borough Manager’s office, Tony Sajone.
Earlier this year, the Borough hired the services of a Special Counsel, Maria Casey, to help investigate that alleged financial mismanagement. It’s since been revealed that an investigator with the state’s Attorney General’s office is now involved on that.
With regard to the IRS, Cadau said it was something he noticed that prompted a visit to Scranton.
“As I was going through the books here, I determined there were numerous late charges to the IRS,” Cadau said, who added that he wanted to get a “better understanding” of the late fees the Borough has paid.
Cadau said one of the biggest issues is with 1099s that Shenandoah may not have sent to some of its professional services contractors.
“I got a lot of zeros from 2020 through 2024,” Cadau said. “There was no one who reported a 1099 under our EIN (Employer Identification Number). There is paperwork that does state that people did receive 1099s but the IRS has no record of that. We have some concerns. We have to look deeper to find out what happened.”
Further Investigation
Shenandoah is also expected to meet with a representative of the state Auditor General’s office and Attorney General’s office in the first two weeks of September, Cadau said.
The Auditor General’s office is looking into how Liquid Fuels money was spent by the Borough in recent years.
Cadau described the upcoming meeting as “just a conversation” and not an audit. He said an issue arose when $100,000 of the slightly less than $125,000 of the Liquid Fuels funds that Shenandoah received in 2024 was placed into the General Fund.
“That raised a red flag,” Cadau said, who added that the Borough didn’t establish a separate bank account for its Liquid Fuels money until 2022.
Subscribe to Coal Region Canary
Get email updates from Coal Region Canary by becoming a subscriber today. Just enter your email address below to get started!Support Coal Region Canary
Like our reporting and want to support truly local news in Schuylkill County? Your small donations help. For as little as $5, your contribution will allow us to cover more news that directly affects you. Consider donating today by hitting the big yellow button below ...