The amount of any balance or shortage or any expenditure or fund
made in a manner prohibited or unauthorized by law, which causes financial
loss to the municipality, shall be a surcharge against any official
or employee who, by malfeasance, misfeasance or nonfeasance, has permitted
or approved such expenditure or shortage to occur, but no elected
or appointed official of a municipality shall be surcharged for any
act, error or omission in excess of the actual financial loss sustained
by the municipality, and any surcharge shall take into consideration
as its basis the results of such act, error or omission and the results
had the procedure been strictly according to law. The provisions hereof
limiting the amount of any surcharge shall not apply to cases involving
fraud or collusion of the part of the officers, nor to any penalty
enuring to the benefit or payable to the Commonwealth.