Pennsylvania Statutes Title 8 Pa.C.S.A. Boroughs and Incorporated Towns § 1059.3. Surcharge by auditors

(i) No elected or appointed official of a borough may be surcharged for any act, error or omission in excess of the actual financial loss sustained by the borough.

(ii) A surcharge shall take into consideration as its basis the results of the act, error or omission and the results had the procedure been strictly in accordance with law.

(iii) Subparagraph (i) shall not apply to cases involving fraud or collusion on the part of officers nor to any penalty enuring to the benefit of or payable to the Commonwealth. Notwithstanding this section, the procedures in the act of May 25, 1945 (P.L. 1050, No. 394),  1 known as the Local Tax Collection Law, shall apply to balances and shortages in the tax accounts of the tax collector.

(iv) No elected or appointed official of a borough may be surcharged if the official acted in good faith reliance on a written, nonconfidential opinion of the solicitor of the borough or on an opinion of the borough solicitor publicly stated at an open meeting of the borough and recorded in the official minutes of the meeting. This subparagraph shall not apply if a solicitor's opinion has been rendered under duress or if the parties seeking and rendering the solicitor's opinion have colluded to purposefully commit a violation of law. As used in this subparagraph, the term “solicitor” shall include a special counsel appointed by the borough for a specific matter.