Borough May Have to Pay Back $144K in COVID Relief Funds Spent on Prohibited Expenses

Shenandoah officials said Monday that the Borough may have to pay back the US Treasury Dept. about $144,000 in COVID relief funds that was spent on unauthorized items.

Borough Manager Mike Cadau informed the public at Monday’s regular Borough Council meeting that approximately $52,000 in COVID relief money was spent settling a lawsuit. And another $92,000 was used to reimburse insurance checks.

Explaining the $92,000, Cadau said, “If you have a fire, the insurance company sends 10% to the Borough to hold in the event you’re going to utilize it for fixing it up, destruction [sic], whatever … I don’t really know why but we paid $92,000 out of the COVID funding. We’re still looking for where that money is at.”

According to the Pennsylvania Treasury, Shenandoah received $499,800.70 in American Rescue Plan Act (ARPA) funds in two tranches:

• $249,112.72 on July 7, 2021 (+$787.63 reallocation on July 15, 2021)
• $249,900.35 on Sept. 9, 2022

Shenandoah did not receive any money from the 2020 CARES Act funding that was distributed to states, then county governments, and applied for by municipalities through the county, according to our previous reporting.

If it’s true that the $144,000 was spent against the liberal rules governing the use of ARPA funding – which allowed for nearly everything – Shenandoah would have to refund the total to the Treasury Dept.

Cadau said there were two or three things ARPA funds couldn’t be used to pay and Shenandoah used the money on two of them.

He, after Monday’s meeting, also pointed to some slipshod accounting of that nearly half-million dollars so he’s unsure if more ARPA funds were spent inappropriately.

It’s also hard for him to determine, based on an examination of the records kept, how much of that money was spent in the last few years. Cadau was appointed Borough Manager at the beginning of 2025.

“I don’t really know what happened,” he said.

Cadau noted that a forensic audit of how Shenandoah spent its COVID funds is currently ongoing with a report expected to be released soon.

Since the Borough has already supposedly submitted an accounting of that money to the Treasury Dept., Cadau said it’s not favorable that Shenandoah can avoid paying it back to the federal government.

“We’re going to do our darnedest to save that money,” he said.

Council President Joe Boris noted that it was the Treasury Dept. that spotted the error.

“The United States Treasury Dept. came calling us,” he said.

Sins of the Past?

As has been the case recently, the current administration in Shenandoah is pointing the finger at previous councils and borough management for this alleged error.

Boris said publicly on Monday that he recalls being an attendee to public meetings when it was being decided how to spend the ARPA funds.

He said borough officials were telling themselves and the public that, at that time, the federal government didn’t have concrete rules on how ARPA funds should be spent.

“They made a fool out of the government … So we’re paying for the sins of others,” Councilman Joe Gawrylik added. “The attorney allowed it. The council allowed it. Why was it allowed?”

^{PHOTO CAPTION: Shenandoah Council President Joe Boris and Manager Mike Cadau explain how the Borough misspent $144,000 in COVID relief funds.}

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