IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Watts Township Board of Auditors, :

Appellant :

:

v. : No. 1429 C.D. 2017

: Submitted: April 13, 2018

Karl Raudensky, Watts Township :

Supervisor :

BEFORE: HONORABLE P. KEVIN BROBSON, Judge1

HONORABLE MICHAEL H. WOJCIK, Judge

HONORABLE ELLEN CEISLER, Judge

OPINION BY JUDGE BROBSON FILED: December 13, 2018

The Watts Township Board of Auditors (Board of Auditors) appeals 

pro se from the September 18, 2017 order issued by the Court of Common Pleas of 

the 41st Judicial District, Perry County Branch (trial court), which sustained the 

appeal of Watts Township Supervisor Karl Raudensky (Raudensky). In that appeal, 

Raudensky challenged the Board of Auditors’ authority to impose a surcharge 

against him pursuant to The Second Class Township Code (Code).2 For the reasons 

discussed below, we affirm.3

 

1 This opinion was reassigned to the authoring judge on July 17, 2018. 

2 Act of May 1, 1933, P.L. 103, as amended, 53 P.S. §§ 65101-68701.

3 This matter is one of four related (but not consolidated) appeals brought before this Court 

by the Board of Auditors, relating to the trial court’s dismissal of various surcharges that the Board 

of Auditors attempted to impose on three Watts Township Supervisors. The other matters are 

docketed as Watts Township Board of Auditors v. Glenn Smithgall, 1430 C.D. 2017, Watts 

Township Board of Auditors v. Patricia Gutheil, 1431 C.D. 2017, and Watts Township Board of 

Auditors v. Patricia Gutheil, 1432 C.D. 2017. In each of these appeals, the Board of Auditors 

raises the same issues. The Pennsylvania State Association of Township Supervisors filed amicus 
2

On May 6, 2016, the Board of Auditors filed in the trial court a “Report 

of the Board of Auditors/Surcharge By Auditors” (Surcharge Report), seeking to 

impose upon Raudensky a surcharge in the amount of $338.65. The Board of 

Auditors averred in the Surcharge Report that, on January 5, 2016, the Township 

Supervisors approved a check payable to Raudensky for $338.65 for his attendance 

at meetings of the Township Supervisors in 2015 in violation of Section 606(a) of 

the Code,4 53 P.S. § 65606(a), which provides, in part, that “[s]upervisors may 

receive as compensation an amount established by ordinance.” As no such 

ordinance existed at the time Raudensky attended the meetings, the Board of 

Auditors asserted that Raudensky could not receive compensation for his attendance. 

The Board of Auditors further averred that the Township Supervisors 

knew that such payment constituted illegal compensation. As detailed in the Board 

of Auditors’ Surcharge Report:

[Raudensky] was also made aware of these payments 

being illegal throughout the year of 2015 at both public 

meetings and through written correspondence. On 

February 11, 2015, Brian Reifsnyder submitted a letter to 

the [Township Supervisors] requesting that an ordinance 

be drafted to legalize their pay. On March 4, 2015, 

[Raudensky], at the monthly [Township] Supervisors’

Meeting, stated that an ordinance is required to be paid. 

At the end of the meeting, the Supervisors ([Raudensky], 

Pat Gutheil, Glenn Smithgall) unanimously agreed to pay 

themselves, along with the rest of the bills. On 

June 3rd, 2015, the Township Solicitor was attending the 

monthly [Township] Supervisors’ Meeting. At that 

meeting, Brian Reifsnyder discussed the requirement of an 

ordinance for the Supervisors[’

] payments with the 

Solicitor. The Supervisors agreed to suspend their pay and 

 

curiae briefs in all four matters, supporting the positions of the Watts Township Supervisors 

(Township Supervisors).

4 Section 606 of the Code was added by the Act of November 9, 1995, P.L. 350.
3

have the Solicitor review the situation. On 

August 5, 2015, the Township Solicitor explained that the 

[Township] Supervisors could pass an ordinance to be 

paid and that after the passage of such an ordinance their 

pay can resume after the election cycle. On 

September 2, 2015, and after disregarding the advice of 

the Township Solicitor, the Township Supervisors 

([Raudensky] and Glenn Smithgall) approved paying 

themselves along with the rest of the bills. 

(Reproduced Record (R.R.) at 1a-2a.)

Thereafter, on June 1, 2016, Raudensky filed a Motion to Strike and 

Appeal, wherein he challenged the Board of Auditors’ authority to impose the 

surcharge. Specifically, Raudensky asserted that because the Township Supervisors

chose to appoint an accounting firm to perform the audit for the 2015 fiscal year, 

Section 917(c) of the Code,5 53 P.S. § 65917(c), divested the Board of Auditors of 

its authority to impose a surcharge. (Motion to Strike and Appeal ¶¶ 8-10.) 

Alternatively, Raudensky challenged the merits of the surcharge, alleging that the 

payment did not violate any provisions of the Code. Accordingly, Raudensky sought 

dismissal of the surcharge. (Id. ¶¶ 13-17.)

On June 7, 2016, the Board of Auditors filed an Opposition to Motion 

to Strike and Appeal. In so doing, the Board of Auditors asserted that, pursuant to 

Section 907 of the Code, 53 P.S. § 65907, it must impose a surcharge any time an 

elected or appointed officer causes a loss to the Township through a violation of the 

law. (Opposition to Motion to Strike and Appeal ¶¶ 1-3.) With respect to the 

appointment of an accounting firm, the Board of Auditors noted that the Township 

Supervisors appointed an accounting firm to audit the 2015 fiscal year, whereas the 

surcharge stemmed from a payment made in the 2016 year. Accordingly, the Board 

 

5 Section 917 of the Code was added by the Act of November 9, 1995, P.L. 350.
4

of Auditors argued that, because the Township Supervisors did not appoint an 

accounting firm for the 2016 fiscal year, the Board of Auditors retained the authority 

to impose the surcharge.6 (Id. ¶¶ 4-5.) Further, the Board of Auditors asserted that 

it asked the accounting firm to investigate the payment, but the accounting firm 

declined. The Board of Auditors viewed this as a violation of the accounting firm’s 

duty. Specifically, the Board of Auditors averred:

On or about February 8th, 2016, the [Board of Auditors] 

delivered a letter to [the accounting firm] to inform [the 

accounting firm that] the [Township Supervisors] were 

paying themselves in violation of Section 606 of the 

[Code] and requested that a surcharge be issued. On or 

about March 4th, 2016, [a representative of the accounting 

firm] verbally informed [a Board of Auditors’ member] 

that [the accounting firm] was not going to investigate the 

allegations of the [Board of Auditors]. 

(Id. ¶ 7.) In light of this, the Board of Auditors apparently believed that Section 907 

of the Code compelled it to impose the surcharge on its own accord. 

After briefing and oral argument, the trial court sustained Raudensky’s 

motion and dismissed the surcharge. In so doing, the trial court concluded that a

board of auditors may issue a surcharge “only in conjunction with an audit.” (R.R.

at 18a.) As the surcharge here did not stem from the findings within an audit, the 

trial court concluded that the Board of Auditors lacked authority to impose the 

surcharge. (Id.) The trial court further held that a board of auditors is divested of 

its surcharge authority when the township supervisors appoint an outside accountant 

 

6 We note that, at the time the Board of Auditors made this assertion, the 

Township’s 2016 fiscal year had not yet been completed. See Section 3201 of the Code, added by 

the Act of November 9, 1995, P.L. 350, 53 P.S. § 68201 (“The fiscal year in townships commences 

on the first day of January in each year. All receipts, disbursements, contracts, and purchases shall 

be entered as of record in the fiscal year in which made.”).
5

to perform the audit. (Id.) The Board of Auditors now appeals the trial court’s 

decision. 

On appeal,

7

the Board of Auditors argues that the trial court erred in 

concluding that the Board of Auditors lacked the authority to impose a surcharge 

against Raudensky when the Township Supervisors appointed an independent 

accountant to perform Watts Township’s annual audit. The Board of Auditors 

further argues the merits of its surcharge, specifically that a surcharge is warranted 

because: (1) the Township Supervisors violated the Code when they compensated 

themselves for supervisory duties in the absence of an ordinance authorizing the 

compensation; (2) the Township Supervisors cannot be compensated retroactively 

for supervisory duties; and (3) the Township Supervisors must wait until the next 

term of office to be compensated at the rate prescribed by an ordinance passed during 

their current term of office.8

As to the Board of Auditors’ authority, the Board of Auditors argues 

that Section 907(a) of the Code authorizes a board of auditors to surcharge a 

township officer any time the officer causes a loss to the township through violation 

of the law. Section 907(a) of the Code provides, in pertinent part, that “[t]he board 

of auditors shall surcharge any elected or appointed officer for the amount of any 

loss to the township caused in whole or in part by the officer’s act or omission in 

violation of law or beyond the scope of the officer’s authority.” Conversely, 

 

7 Because the issue on appeal is purely a question of law, our standard of review is de 

novo and our scope of review is plenary. In re Appeal of 2012 Fin. Audit of Greene Twp., 

113 A.3d 372, 374 n.5 (Pa. Cmwlth. 2015). 

8 The Board of Auditors also argues that the trial court erred when it ruled in favor of 

Raudensky without hearing oral argument from the Board of Auditors, but the Board of Auditors 

waived that argument by failing to raise it in its statement of errors complained of on appeal filed 

pursuant to Pa. R.A.P. 1925(b). See Pa. R.A.P. 1925(b)(4)(vii) (“Issues not included in the 

[s]tatement . . . are waived.”). 
6

Raudensky maintains his position that a board of auditors may only surcharge an 

officer when that surcharge flows from the findings of an audit performed either by 

a board of auditors or an appointed outside accountant. Further, Raudensky asserts 

that, pursuant to Section 917(c) of the Code, the township supervisors’ appointment

of an outside accountant to conduct the audit divests a board of auditors of its

surcharge authority. Section 917(c) of the Code provides: 

When an accountant or firm is appointed under subsection 

(a) or (b) [of Section 917], the board of auditors shall not 

audit, settle or adjust the accounts audited by the appointee 

but shall perform the other duties of the office. The 

accountant or firm has the powers given to the board of 

auditors under this act, except the audit shall be made in 

accordance with generally accepted auditing standards, 

and further provide that the accountant or firm appointed 

under subsection (a) or (b) shall not have the power to 

determine compensations, and they are subject to the same 

penalties as the elected auditors under [the Code]. The 

report of the accountant or firm is subject to appeals the 

same as reports of the board of auditors under [the 

Code].

[9]

Accordingly, this Court must determine whether a board of auditors is authorized to 

surcharge an officer only in connection with an audit, or whether it may surcharge 

an officer at any time. If we conclude the latter, we must then determine whether 

 

9

It appears that the final sentence of Section 917(c) of the Code provides for the right to 

appeal a report prepared by an appointed accountant in the same manner as appealing a report 

prepared by a board of auditors under Section 909 of the Code. Section 909 of the Code provides:

The board of supervisors or any elector or taxpayer of the township or any officer 

whose account is settled or audited by the board of auditors may appeal from any 

settlement or audit of the board of auditors to the court of common pleas within 

forty-five days after the settlement has been filed in the court of common pleas.

Although the parties did not brief the issue, we note that Section 917(c) of the Code appears to 

provide a mechanism for challenging a report prepared by an appointed accountant, provided that 

the appeal is filed within 45 days of the audit’s filing.
7

the township supervisors’ appointment of an accountant to perform an audit divests 

a board of auditors of this surcharge authority.

We begin our analysis by reviewing general principles of statutory 

construction. When interpreting a statute, this Court is guided by the Statutory 

Construction Act of 1972, 1 Pa. C.S. §§ 1501-1991, which provides that “[t]he object 

of all interpretation and construction of statutes is to ascertain and effectuate the 

intention of the General Assembly.” 1 Pa. C.S. § 1921(a). “The clearest indication 

of legislative intent is generally the plain language of a statute.” Walker v. 

Eleby, 842 A.2d 389, 400 (Pa. 2004). “When the words of a statute are clear and 

free from all ambiguity, the letter of it is not to be disregarded under the pretext of 

pursuing its spirit.” 1 Pa. C.S. § 1921(b). Only “[w]hen the words of the statute are 

not explicit” may this Court resort to statutory construction. 1 Pa. C.S. § 1921(c). 

“A statute is ambiguous or unclear if its language is subject to two or more 

reasonable interpretations.” Bethenergy Mines, Inc. v. Dep’t of Envtl. 

Prot., 676 A.2d 711, 715 (Pa. Cmwlth.), appeal denied, 685 A.2d 547 (Pa. 1996). 

Moreover, “[e]very statute shall be construed, if possible, to give effect to all its 

provisions.” 1 Pa. C.S. § 1921(a). It is presumed “[t]hat the General Assembly 

intends the entire statute to be effective and certain.” 1 Pa. C.S. § 1922(2). Thus, 

no provision of a statute shall be “reduced to mere surplusage.” Walker, 

842 A.2d at 400. Finally, it is presumed “[t]hat the General Assembly does not 

intend a result that is absurd, impossible of execution or unreasonable.” 1 Pa. C.S. 

§ 1922(1).

Here, the Code is silent as to when a board of auditors may impose a 

surcharge. To that point, Section 907 of the Code is subject to two reasonable 

interpretations as to when this may occur. Section 907 of the Code provides:
8

(a) The board of auditors shall surcharge any 

elected or appointed officer for the amount of any loss to 

the township caused in whole or in part by the officer’s act 

or omission in violation of law or beyond the scope of the 

officer’s authority. If the auditors find an absence of intent 

to violate the law or exceed the scope of authority and find 

the result of the officer’s act could have been achieved by 

legal means and authorized procedures, the surcharge 

imposed shall be limited to the difference between the 

costs actually incurred by the township and the costs that 

would have been incurred had legal means and authorized 

procedures been employed. Provisions of this section 

which limit the amount of surcharge do not apply to cases 

involving fraud or collusion on the part of the officers or 

to any penalty ensuing to the benefit of or payable to the 

Commonwealth.

(b) Any balance in any report of board of auditors

against any officer of the township constitutes a surcharge 

against the officer as fully as if expressly stated in the 

report to be a surcharge. The board of auditors shall direct 

the clerk of court of common pleas to certify the amount 

of every balance or surcharge from which no appeal has 

been taken under [S]ections 909 and 910 [of the Code, 

53 P.S. §§ 65909 and 65910,] to the court of common 

pleas, and the prothonotary shall enter the balance or 

surcharge as a judgment against the officer in favor of the 

township.

(Emphasis added.) While Section 907(a) may be interpreted to mean that a board of 

auditors has authority to impose a surcharge any time an elected or appointed officer 

causes a loss to the township through a violation of the law, Section 907(b) seems to 

suggest that a surcharge only stems from a report of a board of auditors, i.e., an audit 

report. When read alone, Section 907 provides little guidance in determining when 

a board of auditors may impose a surcharge. We are mindful, however, that statutory 

language must be read in its context, and “every portion of statutory language is to 

be read ‘together and in conjunction’ with the remaining statutory language, ‘and 

construed with reference to the entire statute’ as a whole.” Commonwealth v. Office 
9

of Open Records, 103 A.3d 1276, 1285 (Pa. 2014) (citing Bd. of Revision of Taxes, 

City of Phila. v. City of Phila., 4 A.3d 610, 622 (Pa. 2010)). Therefore, we must 

review Section 907’s context within the Code.

In determining when a board of auditors may impose a surcharge, we 

are guided by the governing provisions found in Article IX of the Code, 

53 P.S. §§ 65901-65917, entitled “Auditors; Accountants.” Preliminarily, 

Section 901 of the Code, 53 P.S. § 65901, provides general guidelines regarding a

board of auditors’ operating procedure and duties. Specifically, Section 901 

mandates that a board of auditors (1) conduct an annual meeting; (2) audit, settle, 

and adjust the accounts of all elected or appointed officials of the township and its 

boards or agencies that received or disbursed funds of or owing to the township 

during the immediately preceding calendar year; (3) determine the compensations 

for supervisors employed by the township; (4) audit the dockets, transcripts and 

other official records of the district justices to determine the amount of fines and 

costs paid over or due the township; and (5) audit the accounts of officials who have 

passed away or resigned. 

Section 902 of the Code, 53 P.S. § 65902, sets the compensation for a

board of auditors. Sections 903 and 904 of the Code, 53 P.S. §§ 65903-65904, vest 

a board of auditors with authority to issue subpoenas in order to complete the audit, 

in addition to establishing a deadline by which a board of auditors must complete 

the audit. Section 905 of the Code, 53 P.S. § 65905, provides for penalties for 

auditors who fail to comply with Article IX of the Code. Section 906 of the Code, 

53 P.S. § 65906, provides that a board of auditors may petition for the appointment 

of counsel if a disagreement occurs between a board of auditors and any official it is 
10

required to audit.

10

 Section 907 of the Code, as previously mentioned, governs the 

imposition of a surcharge, and Section 908 of the Code, 53 P.S. § 65908, governs 

the collection of a judgment entered for a surcharge. Sections 909 through 915 of 

the Code,

11 53 P.S. §§ 65909-65915, govern the surcharge appeal process. 

Section 916 of the Code,

12 53 P.S. § 65916, forbids any member of a board of 

auditors from having a financial interest in township transactions. Finally, 

Section 917 of the Code permits the township supervisors to appoint a certified or 

competent public accountant or a firm of certified or competent public accountants

to perform the audit. When the township supervisors appoint an accountant to 

perform the audit, Section 917(c) serves to limit a board of auditors’ power to 

perform other duties. Specifically, Section 917(c) of the Code provides, in part, that 

when an accountant is appointed, “the board of auditors shall not audit, settle or 

adjust the accounts audited by the appointee but shall perform the other duties of 

the office,” and that “[t]he accountant or firm has the powers given to the board of 

auditors under [the Code], except the audit shall be made in accordance with 

generally accepted auditing standards.” 

Here, a review of the above provisions of the Code reveals a statutory 

scheme indicating that a surcharge flows from an audit. Specifically, the seemingly 

purposeful order of the sections within the Code aids us in coming to this conclusion. 

Section 901 of the Code details the general duties of a board of auditors, among 

 

10 While not directly applicable to the central issue, we note that we are troubled by the fact 

that the Board of Auditors is proceeding pro se in this matter. Although the Board of Auditors 

petitioned for the appointment of counsel—which the trial court denied—the Board of Auditors is 

not, ipso facto, authorized to proceed pro se. 

11 Sections 913 through 915 of the Code were added by the Act of November 9, 1995, 

P.L. 350.

12 Section 916 of the Code was added by the Act of November 9, 1995, P.L. 350.
11

which is the duty to audit. Section 903 of the Code vests power within a board of 

auditors to issue subpoenas in order to complete its audit, while Section 904 of the 

Code provides a deadline by which a board of auditors must complete the audit. 

Thereafter, Section 907 of the Code authorizes a board of auditors to impose 

surcharges, while the subsequent sections primarily govern the surcharge appeal 

process. We determine that the General Assembly intentionally structured the Code 

in this manner, as each section builds logically on the prior, following the general 

procedure of (1) a board of auditors performing an audit, (2) a board of auditors 

imposing surcharges stemming from the audit, and (3) the ability of a surcharged 

party to appeal. 

We find no case law that contradicts our conclusion that a surcharge 

must flow from the findings of an audit. To the contrary, in over 100 years of case 

law wherein a board of auditors imposed a surcharge, the surcharge stemmed 

directly from findings in an audit or auditor’s report.13 See, e.g., Audit of Hanover 

Twp. Sch. Dist., 108 A. 656, 657 (Pa. 1919); Commonwealth, to Use of Clarion Cty. 

v. U.S. Fid. & Guar. Co., 69 A. 550, 551 (Pa. 1908); In re Appeal of 2012 Fin. Audit 

for Greene Twp., 113 A.3d at 373 n.2; In re 1995 Audit of Middle Smithfield Twp., 

701 A.2d 793, 793-94 (Pa. Cmwlth. 1997), appeal denied, 727 A.2d 134 (Pa. 1998); 

In re Report of Audit of S. Union Twp. for 1975, 407 A.2d 906, 910 (Pa. 

Cmwlth. 1979) (“The action of imposing surcharges in conjunction with the 

auditors’ report . . . is civil in nature[.]”); Brady Twp. v. Ashley, 331 A.2d 585, 586 

(Pa. Cmwlth 1975). While none of these cases directly stand for the proposition that 

a surcharge must stem from the findings within an audit, we do not believe their 

 

13 We note that “audit” and “auditor’s report” have been used interchangeably. See In re 

Appeal from Settlement and Audit of Auditors of Buckingham Twp., Bucks Cty., 460 A.2d 904, 906 

(Pa. Cmwlth. 1983).
12

identical postures are a matter of coincidence. Further, insofar as Section 907(a) of 

the Code can be interpreted to require a board of auditors to impose a surcharge at 

any time an officer violates the law and causes a loss to the township without first 

conducting an audit, we have found no case law—or any other persuasive 

authority—to support that alternative interpretation. 

Here, it is clear that the Board of Auditors did not impose the surcharge 

in connection with an audit. As set forth in the Board of Auditors’ Opposition to 

Motion to Strike and Appeal, the Board of Auditors requested that the accounting 

firm investigate the payment as part of its fiscal year 2015 audit, but the accounting 

firm declined to do so.14 (Opposition to Motion to Strike and Appeal ¶ 7.) The 

Board of Auditors, therefore, opted to impose the surcharge on its own accord, using 

the findings of its own investigation instead of those from an audit. As we have 

concluded that any imposition of a surcharge must flow from the findings of an audit, 

we must conclude that the Board of Auditors lacked authority to impose a surcharge 

upon Raudensky. Accordingly, we affirm the trial court’s dismissal of the 

surcharge.15

P. KEVIN BROBSON, Judge

 

14 The record is silent as to whether the Board of Auditors attempted to appeal the substance 

of the 2015 audit under Section 917(c) of the Code. 

15 As we dispose of the matter on these grounds, we need not address the remaining issues 

on appeal relating to the merits of the surcharge. 
IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Watts Township Board of Auditors, :

Appellant :

:

v. : No. 1429 C.D. 2017

:

Karl Raudensky, Watts Township :

Supervisor :

O R D E R

AND NOW, this 13th day of December, 2018, the Order of the Court of 

Common Pleas of the 41st Judicial District, Perry County Branch, is AFFIRMED.

P. KEVIN BROBSON, Judge